We recently published a list of 12 Best Affordable Stocks To Buy Right Now. In this article, we are going to take a look at where JPMorgan Chase & Co. (NYSE:JPM) stands against other best affordable stocks to buy.
Economic and Market Outlook 2025
There has been a growing debate regarding whether the economy of the United States will have a soft landing. A recent report by Vanguard titled “Beyond Landing” released on November 25 discusses the economic outlook for the year ahead. The report highlighted that global inflation has significantly decreased over the past two years, nearing the target of 2%. However, this decline has been inconsistent across different regions, with many developed markets experiencing slowdowns due to monetary policy adjustments. The United States stands out as an exception, showcasing robust economic growth and full employment despite restrictive monetary policies.
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The report raised critical questions about whether the US has achieved a “soft landing” or if high interest rates will eventually lead to a “hard landing.” The narrative has largely focused on the Federal Reserve’s ability to time rate cuts effectively to facilitate painless disinflation. Vanguard suggests that the strong growth and falling inflation in the US may be better explained by supply-side dynamics, such as increased labor productivity and a surge in available labor, rather than solely by Federal Reserve policies.
Regarding the 2025 outlook, the firm anticipates that US real GDP growth may decline from around 3% to closer to 2%, influenced by potential policy risks like trade tariffs and stricter immigration regulations. Core inflation is expected to remain above 2.5% for most of 2025. The firm also predicts that interest rates will stabilize at levels higher than those seen during the 2010s, fostering better returns in cash and fixed-income markets over the next decade. However, they express caution regarding equity markets due to elevated valuations. The report highlights a tension between momentum and valuation in risk assets, suggesting that while some stocks may continue to perform well, their high valuations could pose risks if economic conditions change unexpectedly.
A group of business people discussing plans around a boardroom table adorned with a financial services company logo.
Our Methodology
To compile the list of the 12 best affordable stocks to buy right now, we used the Finviz stock screener, Yahoo Finance, and Seeking Alpha. Using the screener we shortlisted stocks trading below a Forward P/E of 15, as of December 4, and that are expected to experience earnings growth this year. Next, we sorted our initial list by market capitalization and cross-checked the Forward P/E of each stock from Seeking Alpha and earnings growth from Yahoo Finance. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders as per Insider Monkey’s database for Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
JPMorgan Chase & Co. (NYSE:JPM)
Forward P/E Ratio: 13.7
Earnings Growth This Year: 12.32%
Number of Hedge Fund Holders: 105
JPMorgan Chase & Co. (NYSE:JPM) is one of the largest multinational financial services companies that serves more than 100 countries. The company provides banking solutions, capital-raising services to companies, institutions, and the government, and risk management services. According to Jamie Dimon, Chairman and CEO, the bank retained its title as the number 1 bank in U.S. retail deposits for the fourth consecutive year.
Over the past several years banks have been grappling with the high interest rates in the United States. JPMorgan Chase & Co. (NYSE:JPM) has navigated this tough macro environment impressively and continued to post staller earnings. During the fiscal third quarter of 2024, the bank posted better-than-expected results with revenue growing 6% year-over-year to $43.32 billion, driven by a 3% growth in net interest income.
Its Commercial and Investment banking segment was a prominent contender with year-over-year net-income growth of 13%. The segment gained from a 31% rise in investment banking fees, which were bolstered by higher charges across all product lines. Jamie Dimon has indicated JPMorgan Chase & Co. (NYSE:JPM) will invest heavily in technology and artificial intelligence (AI), which he thinks will enable the bank to better serve its clients and capitalize on market opportunities.
Carillon Eagle Growth & Income Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM) in its first quarter 2024 investor letter:
“JPMorgan Chase & Co. (NYSE:JPM) contributed positively to performance following solid financial results and positive guidance for the remainder of 2024. Moreover, growing chatter around rising capital markets activity likely contributed to the stock’s strong performance relative to other banks. Recall that JPMorgan has a robust capital markets franchise.”
Overall, JPM ranks 2nd on our list of best affordable stocks to buy right now. While we acknowledge the potential of JPM to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than JPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
