6. JPMorgan Chase
Shares of JPMorgan Chase (JPM) closed at $30.62 Friday, down 26% year-to-date Based on a quarterly payout of 25 cents, the shares have a dividend yield of 3.27%.
Life is never boring for JPMorgan's investors, with the company having exposure to so many facets of the international economy. The shares dropped 8% last Wednesday, after Fitch Ratings said that the company's net exposure to stressed European markets was 12.6% of its Tier 1 capital.JPMorgan Chase is also expecting and encouraging a wave of mortgage loan refinancing activity, with the Federal Housing Finance Agency's recent expansion of the Home Affordable Refinance Program, or HARP , under which qualified borrowers whose loans are held by Fannie Mae (FNMA) or Freddie Mac (FMCC) -- many of which were originated by and are serviced by JPMorgan -- can refinance their entire loan balances, no matter how much the values of the underlying homes have declined. Please see TheStreet's earnings coverage for discussion of the company's somewhat disappointing third-quarter results. The third-quarter ROA was 0.76%, according to SNL Financial. After JPMorgan Chase announced its third-quarter results, FBR analyst Paul Miller lowered his 2012 earnings estimate for the company to $5.00 a share from $5.65, but reiterated his buy rating and $46.00 price target for the shares, saying the company was "well positioned with a 7.7% Tier 1 common ratio per Basel III requirements." The shares trade for just 6.2 times the consensus 2012 EPS estimate of $4.89, among analysts polled by FactSet, making JPMorgan by far the cheapest to forward earnings among this group of bank and thrift holding companies. The shares trade just below tangible book value, according to SNL. Out of 24 analysts covering JPMorgan Chase, 22 rate the shares a buy. The remaining two analysts have neutral ratings.
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