Bank of America (NYSE:BAC) vs. JPMorgan Chase & Co. (NYSE:JPM) Financial Comparison

JPMorgan Chase & Co. (NYSE:JPM) and Bank of America (NYSE:BAC) are both large-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Profitability

This table compares JPMorgan Chase & Co. and Bank of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JPMorgan Chase & Co.	20.96%	16.99%	1.31%
Bank of America	14.10%	10.29%	0.84%

Volatility & Risk

JPMorgan Chase & Co. has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Insider & Institutional Ownership

71.6% of JPMorgan Chase & Co. shares are held by institutional investors. Comparatively, 70.7% of Bank of America shares are held by institutional investors. 0.8% of JPMorgan Chase & Co. shares are held by company insiders. Comparatively, 0.3% of Bank of America shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares JPMorgan Chase & Co. and Bank of America”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JPMorgan Chase & Co.	$169.44 billion	4.14	$58.47 billion	$19.74	12.71
Bank of America	$101.89 billion	3.19	$27.13 billion	$3.22	13.29

JPMorgan Chase & Co. has higher revenue and earnings than Bank of America. JPMorgan Chase & Co. is trading at a lower price-to-earnings ratio than Bank of America, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for JPMorgan Chase & Co. and Bank of America, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JPMorgan Chase & Co.	0	9	10	0	2.53
Bank of America	1	5	16	3	2.84

JPMorgan Chase & Co. presently has a consensus price target of $252.89, suggesting a potential upside of 0.76%. Bank of America has a consensus price target of $48.45, suggesting a potential upside of 13.19%. Given Bank of America’s stronger consensus rating and higher probable upside, analysts clearly believe Bank of America is more favorable than JPMorgan Chase & Co..

Dividends

JPMorgan Chase & Co. pays an annual dividend of $5.60 per share and has a dividend yield of 2.2%. Bank of America pays an annual dividend of $1.04 per share and has a dividend yield of 2.4%. JPMorgan Chase & Co. pays out 28.4% of its earnings in the form of a dividend. Bank of America pays out 32.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. JPMorgan Chase & Co. has raised its dividend for 15 consecutive years and Bank of America has raised its dividend for 11 consecutive years.

Summary

JPMorgan Chase & Co. beats Bank of America on 11 of the 18 factors compared between the two stocks.

About JPMorgan Chase & Co.

JPMorgan Chase & Co. is a financial holding company, which engages in the provision of financial and investment banking services. The firm offers a range of investment banking products and services in all capital markets, including advising on corporate strategy and structure, capital raising in equity and debt markets, risk management, market making in cash securities and derivative instruments, and brokerage and research. It operates through the following business segments: Consumer and Community Banking (CCB), Corporate and Investment Bank (CIB), Commercial Banking (CB), Asset and Wealth Management (AWM), and Corporate. The CCB segment serves consumers and businesses through personal service at bank branches and through automated teller machines, online, mobile, and telephone banking. The CIB segment offers a suite of investment banking, market-making, prime brokerage, lending, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, merchants, governments, and municipal entities. The CB segment provides comprehensive financial solutions, including lending, wholesale payments, investment banking and asset management products for middle market banking, corporate client banking, and commercial real estate banking. The AWM segment provides investment and wealth management services. The Corporate segment consists of treasury, chief investment office, and other corporate. The company was founded in 1968 and is headquartered in New York, NY.

About Bank of America

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, non-interest and interest-bearing checking accounts, and investment accounts and products; credit and debit cards; residential mortgages, and home equity loans; and direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The GWIM segment provides investment management, brokerage, banking, and trust and retirement products and services; wealth management solutions; and customized solutions, including specialty asset management services. The Global Banking segment offers lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, short-term investing options, and merchant services; working capital management solutions; debt and equity underwriting and distribution, and merger-related and other advisory services; and fixed-income and equity research, and certain market-based services. The Global Markets segment provides market-making, financing, securities clearing, settlement, and custody services; securities and derivative products; and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1784 and is based in Charlotte, North Carolina.