JP Morgan Chase (JPM) stock price has done well over the years as the company continued growing its market share in the banking industry. Its total return in the last five years has increased by over 136% while the S&P 500 index has risen by 108%. 

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JP Morgan growth is continuing

The United States is home to some of the most important companies globally. For example, the recent CrowdStrike outage paralyzed businesses globally, leading to billions of dollars in losses. 

We saw the same thing a few years ago when Fastly, a small CDN provider, suffered an outage that affected all types of businesses. 

The US is also home to other critical companies like Microsoft, Amazon, and Google. If these firms suffered an outage, the world would be a highly difficult place.

I put JP Morgan Chase as another company that has become critical to the US and the global economy. It is the biggest bank in the world by market cap and assets. In its most recent results, it said that it had about $4 trillion in assets.

JP Morgan operates its business in several key segments: consumer and community banking, corporate and investment banking, commercial banking, and asset and wealth management banking.

These services mean that the company has operations that touch millions of Americans. For example, in its consumer business, the company offers banking solutions to ordinary people like credit cards and lending.

In its wealth and asset management, JPMorgan has over $3.4 trillion in assets while its total customer deposits have jumped to over $2.4 trillion.

JPMorgan has grown its business both organically and through acquisitions. It acquired Bear Sterns in 2008 and First Republic in 2023 for bargain prices as they neared their end. It also bought Washington Mutual and Chase Manhattan. 

JPMorgan’s growth and profits

JPMorgan Chase business has done well over the years as it has become the most important bank in the United States. Total revenue rose from over $110 billion in 2019 to over $146 billion in 2023.

Its scale has also helped it to become a highly profitable company as its net profit has jumped from over $36 billion to $50 billion. 

The most recent financial results demonstrated how strong JPMorgan Chase was doing. Its revenue rose to $51 billion while its net income jumped to over $18.1 billion. The company spent over $3.8 billion repurchasing its stock and $3.3 billion paying dividends. 

JPMorgan beats other American banks because of Jamie Dimon’s approach of creating a fortress balance sheet. It has a CET Capital ratio of 15.3%, higher than most banks. For example, companies like Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley have a ratio of less than 14.

The CET1 ratio is an important number that looks at a bank’s financial strength and stability. It refers to the company’s core capital against its risk-weighted assets. This financial strength makes it one of the most stable banks in the US. 

JPMorgan is not a very expensive company as it trades at a forward price-to-book ratio of 1.92, higher than the sector median of 1.22. Its price-to-earnings ratio of 12.40 is lower than the sector median of 13.24.

The company has a 2.07% dividend yield and a payout ratio of less than 25%, making it a very safe one. Also, it has continued to reduce the amount of outstanding shares from over 2.92 billion in 2023 to 2.85 billion and the trend will continue.

JP Morgan stock price analysis

The daily chart shows that the JPM share price has done well over the years. It has soared from a low of $96.95 in 2022 to over $225. The stock has jumped above the key resistance point at $218, its highest swing in July and now sits at the highest point on record.

JPMorgan has remained above all moving averages while the MACD and the Relative Strength Index (RSI) have pointed upwards, meaning that it has the momentum. 

Therefore, the stock will likely continue rising in the coming months as bulls target the key resistance point at $250.

While the stock will always have some volatility, the best approach to look at JPMorgan is not in terms of its returns in the next year or 5. Instead, you should look at it in terms of the next 50 years. Chances are that it will be there and that its business will be much bigger than it is today.

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