7. JPMorgan Chase (JPM) is a diversified financial company whose commercial bank serves 26,000 clients. It also has an investment banking unit.
Quarter: JPMorgan's third-quarter net income increased 23% to $4.4 billion and earnings per share climbed 26% to $1.01. Revenue dropped 11% to $27 billion. The gross margin widened from 61% to 77% and the operating margin extended from 31% to 44%. JPMorgan held $290 billion of cash and equivalents at the end of the quarter and $660 billion of debt, converting to a debt-to-equity ratio of 3.8. It had a tier-one capital ratio of 9.5% at quarter's end.
Valuation: JPMorgan's stock trades at a forward earnings multiple of 8.1 and a sales multiple of 1.3, 27% and 24% discounts to financial services industry averages. Its book value multiple, though ostensibly cheap at 0.9, is on par with the peer average. And its cash flow multiple of 29 reflects a 50% premium. JPMorgan is selling for a trailing earnings multiple of 11, a 27% peer discount and a 53% discount to its five-year average multiple of nearly 23.Dividend: JPMorgan pays a paltry quarterly dividend of five cents, translating to a 0.5% annual yield with a 6% payout ratio. It has paid a five cent dividend since 2009. Previously, it paid a distribution of up to 38 cents.
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