JPMorgan Chase (JPM) has been one of the strongest banks so far this year, with shares rising over 31% since the start of the year. A big reason the stock has been strong as of late is its ability to pass the latest stress test that the Federal Reserve performed on the nation’s largest banks. After which, the Fed allowing JPMorgan to up its dividend and authorize the repurchase of $15 billion in shares. It was the second time in two years the bank passed a stress test. The strength of JPMorgan’s business was made evident in its most recent quarterly report, which showed better-than-expected earnings. Its first-quarter revenues were $26.7 billion, which easily outpaced analyst estimates for revenues of $24.4 billion. Earnings were also impressive, coming in at $1.28 per share, versus analyst estimates for $1.18, in-line with the same period last year. Analysts have forecast that the company’s earnings will grow by 7.6% annually over the next five years, which is not bad, but less than the 9.2% growth rate forecast for the banking industry. With the banking sector improving, we like JPMorgan, and with the stock trading with a P/E of just 9.6 there is still room for the stock to trade higher. The stock currently gets a 4 STARs (out of 5) accumulate rating from S&P, and is paying a 2.8% annual dividend.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.