Ticker: JPM, Buy below $120.
JP Morgan Chase is an American multinational investment bank and financial services holding company.
Why I Would Buy
- Return on Equity – JPM has averaged a decent 9 to 14% RoE for all of past decade.
- Cheap – Forward P/E less than 13x.
- Dividend – generous 3.5%+ yield, <35% payout ratio.
- Credit Ratings – Strong long term credit ratingsAA-/A-
What Could Go Wrong
- Complexity –Complex opaque trading operations, non-trivial probability of a blowup like other Wall Street giants in the 2009.
- Book Value – Trading a relatively high book value multiple (1.4x).
Disclosure: I am long JPM, please read additional disclosures here before taking any action based on this post.