JPM Corporation Analysis
JPM Corporation Analysis
Banks are an industry that has been in meltdown for a long time. Finance and capitalism are bound to go together, with J.P. Morgan as the bank's flagship The sector is financial and we're going to do a corporate analysis of JPMorgan, a world-famous U.S.
Do sales and profits continue to grow?
Sales started at 114,143 (million dollars) in 2017 and went upward until 2019, but sales decreased slightly from 2020. This is a decrease of more than 10% from 2019. Operating profit rose upward starting with 35,872 (million dollars) in 2017, but temporarily decreased significantly in 2020. However, compared to 2021 and 2017, it shows a good increase of about 162%.
Is dividend growth continuously growing?
It was allocated $2.04 in 2017 and $3.70 in 2021. The five-year CAGR is 14.99%. This means that the dividend amount is increasing by about $0.4 every year, and the business is growing without problems beyond the amount of dividend increase. It is a significant dividend growth rate for five years. However, dividend growth over the past two years has been somewhat small. Due to the nature of financial stocks that value dividends, rising sales are often reflected in dividends, but on the contrary, if sales do not increase significantly, dividend growth has increased slightly in form. Sales and profits in 2020 were somewhat bad, resulting in small dividend growth in 2021.
Is the price cheap now? Is it expensive?
Is JPMorgan's past dividend rate cheap? There are so many different perspectives on whether it is expensive, so I can't say that my perspective fits exactly, but I personally use a comparison between the average dividend rate over the last five years and the current dividend rate. If you make money in a corporation, I think dividends are the basis of giving back to shareholders Or if you are confident of making more money, it is okay to buy R&D or treasury stocks. The average dividend rate for the past five years is 2.62% and the current dividend rate is 3.15%, with 2.04% in 2018, 2.68% in 2019, 3.38% in 2020, 2.34% in 2021, and 2.66% in 2022.
JPMorgan YTD
JPMorgan's YTD in 2022 is -21%, and the current dividend rate is more attractive than in the past because stock prices continued to flow this year. JPM, the largest bank in the U.S., reported on the 13th that its net profit fell 42% year-on-year. When stock prices fall, there are all reasons. JPMorgan Chase (JPM) saw its first-quarter net profit fall 42% year-on-year. This is the result of high inflation and $1.5 billion in asset accounting losses from Russia's invasion of Ukraine. Banks have no choice but to set aside $1.46 billion in assets linked to Russia and those negatively exposed to inflation and treat them as losses in case of an emergency. There is also a risk of dividend cuts when profits decrease significantly due to the large impact of the Ukraine-Russia war. In fact, if dividend cuts occur, dumping may occur and stock prices may plunge. Jamie Dimon, CEO of JP Morgan, praised blockchain technology and cryptocurrency-based financial services, Defi, in a shareholder letter on April 4 (local time). JPM Coin is a virtual currency for payment issued by JPMorgan and is a stable coin with a fixed value of one-on-one with the U.S. dollar. JPMorgan is showing an active investment bank, not just a bank seeking loan-to-deposit margin. Unlike most banks that are negative about cryptocurrency, JPMorgan is showing a positive attitude. JPMorgan also achieves profits through investment In fact, he has recently been criticized by domestic investors, but he has benefited greatly from AhnLab's single-handed investment. JPMorgan is a bank that survived the subprime crisis and is currently considered to be an inexpensive stock among the past five years. Of course, if the war is prolonged and the second quarter's net profit is also bad, additional stock price declines could occur. The investment method I pursue is not to invest in rising stocks and expect further gains, but to buy them in the short-term undervalued section and wait until the high-valued section arrives. In the worst case, GE is the representative company that has disappeared as a declining industry due to the change of the times, and the company that invested is the case where the company cannot find the stock price of the past forever. But finance can never be eliminated under the capitalist system Additional stock price declines may occur, but it is difficult to become like a GE. Of course, there are cases of bankruptcy like the Lehman Brothers crisis, but if such a case actually occurs, the world will come where the fall in stocks invested is not the problem.