JPMorgan vs. Bank of America: Which Stock is The Better Investment Now?

(Free on Substack) Flash Note (JPM US, Neutral) (BAC US, Buy)

A version of this has been published on my Twitter account.

Introduction: JPMorgan Chase (“JPM”) stock has lost 13% since Q4 2021 results last week (Jan 13), and now trades at lower valuation multiples than close peer Bank of America (“BAC”). This brief note compares the attractiveness of the two stocks as investments.

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Background: JPM Now “Cheaper” Than BAC

After the share price action this week, JPM is now “cheaper” than BAC on Price / Tangible Book Value (“P/TBV”) as well as other valuation metrics:

• JPM: 2.0x P/TBV ($71.53), 12.4x 2019 EPS, 2.7% Dividend Yield

• BAC: 2.1x P/TBV ($21.68), 13.2x 2019 EPS, 1.8% Dividend Yield

(2019 EPS figures have been adjusted for buybacks.)

We had been long-time holders of both JPM and BAC stock, but downgraded JPM to Neutral in April 2021, while keeping our rating on BAC as Buy: