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10 Bank Stock Value Picks

Stocks in this article: BAC C JPM RF COF PNC BPOP DRL OFG BFIN

6. JPMorgan Chase
Shares of JPMorgan Chase (JPM) closed at $36.97 Friday, returning 14% year-to-date, following a 20% decline during 2011.

The shares trade for 1.1 times tangible book value, and for 7.1 times the consensus 2013 EPS estimate of $5.23. The consensus 2012 EPS estimate is $4.70.

Based on a quarterly payout of 30 cents, the shares have a dividend yield of 3.25%.

The company on July 13 reported a second-quarter profit of $5 billion, even after absorbing $4.4 billion in trading losses, from the now infamous hedging activities of the company's Chief investment office. During JPMorgan's second-quarter earnings conference call, CEO James Dimon said that the company had "significantly reduced the total synthetic credit risk in CIO," and that "hopefully, if all goes well, we can start buying back stock early in the fourth quarter."

The Federal Reserve in March had approved a plan by JPMorgan to increase its quarterly dividend by a nickel a share to 30 cents, along with $12 billion in common share repurchases s during 2012, followed by another $3 billion in buybacks during the first quarter of 2013. The buybacks were suspended in May, when JPMorgan first announced the CIO trading losses.

When the company on Thursday filed its second-quarter 10-Q report with the Securities and Exchange Commission, JPMorgan Chase pushed back the planned resumption of share buybacks to the first quarter of 2013, "subject to the Board's completion of its work on CIO and the Firm's receiving no objection from the Federal Reserve to the re-submitted capital plan."

KBW analyst David Konrad rates JPMorgan Chase "Outperform," with a $49 price target, and on Friday lowered his EPS estimates for the company slightly, to $4.70 for 2012 and $5.45 for 2013. Konrad said his firm's estimates now "assume no buyback for the remainder of 2012 and $9.7 billion in 2013."

JPM Chart JPM data by YCharts

Interested in more on JPMorgan Chase? See TheStreet Ratings' report card for this stock.

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