This is a step-by-step stock review to answer the question, is JPMorgan Chase (JPM) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is JPMorgan Chase (JPM) stock a good buy?
- JPMorgan Chase Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is JPMorgan Chase (JPM) stock a good buy?
1. JPMorgan Chase Company History
- Founded in 2000: JPMorgan Chase & Co. was formed through the merger of J.P. Morgan & Co. and Chase Manhattan Corporation, creating one of the largest financial institutions in the world.
- Headquarters: Based in New York City, JPMorgan Chase operates globally with a strong presence in major financial markets.
- Historical Roots: The company has deep historical roots, with J.P. Morgan’s origins dating back to 1871 and Chase Manhattan’s beginnings in 1799.
- Global Leader: JPMorgan Chase is a leading global financial services firm, offering a wide range of services including investment banking, financial transaction processing, asset management, and private equity.
- Key Acquisitions: Notable acquisitions include Bear Stearns and Washington Mutual during the 2008 financial crisis, expanding its market share and capabilities.
- Innovative Banking: The firm is known for its financial innovation, robust risk management, and significant influence in global financial markets.
- Publicly Traded: JPMorgan Chase is listed on the New York Stock Exchange under the ticker symbol JPM, reflecting its strong market position and financial performance.
- Commitment to Sustainability: The company is increasingly focused on sustainable finance and environmental, social, and governance (ESG) initiatives.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 67
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how JPMorgan Chase makes money:
- Interest Income: JPMorgan Chase earns money from interest on loans and credit extended to individuals and businesses.
- Investment Banking Fees: They generate revenue through fees for services such as mergers and acquisitions, underwriting, and advisory.
- Asset Management: The company makes money from managing investment funds and assets for individuals, institutions, and pension funds.
- Trading and Investments: JPMorgan Chase profits from trading financial instruments and investing in securities, derivatives, and other assets.
- Retail Banking Fees: They earn revenue from fees associated with retail banking services, including account maintenance, overdrafts, and transaction fees.
- Wealth Management: The company provides wealth management services and financial planning, earning fees from high-net-worth individuals and families.
- Mortgage Services: They make money from originating, servicing, and selling mortgages, including related fees and interest income.
Here are a few of the other companies that JPMorgan Chase has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- Bear Stearns
- Washington Mutual
- OneMain Financial
- Franklin Templeton’s Retirement Business
- The Chicago-based business of Standard Chartered
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how JPMorgan Chase stacks up against other companies.
- Banco Bilbao Vizcaya Argentaria, S.A.(BBVA) – 89
- Nu Holdings Ltd.(NU) – 78
- Wells Fargo & Company.(WFC-PZ) – 72
- Wells Fargo & Company.(WFC-PA) – 72
- Wells Fargo & Company.(WFC-PD) – 72
- JPMorgan Chase & Co.(JPM) – 67
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Navigated the Financial Crisis: Jamie Dimon led JPMorgan Chase through the 2008 financial crisis, maintaining stability and profitability while many competitors struggled.
- Acquisition of Bear Stearns and Washington Mutual: He successfully orchestrated the acquisitions of Bear Stearns and Washington Mutual, expanding JPMorgan Chase’s market share and financial strength.
- Record Profits and Revenue: Under Dimon’s leadership, JPMorgan Chase achieved record profits and revenue, solidifying its position as one of the most profitable banks in the world.
- Expansion into New Markets: Dimon oversaw significant expansion into international markets and new financial services, enhancing the bank’s global presence.
- Emphasis on Technology and Innovation: He promoted investments in technology and digital banking, improving operational efficiency and customer experience.
- Strong Regulatory Compliance: Dimon strengthened the bank’s compliance and risk management practices, helping JPMorgan Chase maintain regulatory standing and avoid major penalties.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of JPMorgan Chase (JPM) is 69/100.
To see the most up-to-date 4M Score, please log into Tykr
7. Is JPMorgan Chase (JPM) stock a good buy?
Some of the top questions investors can have is JPMorgan Chase (JPM) stock a good buy or should I buy stock?
JPMorgan Chase (JPM) is a strong investment choice with several key advantages. As one of the largest and most well-established financial institutions globally, JPMorgan Chase offers stability and extensive financial services, including investment banking, asset management, and retail banking. The company has demonstrated resilience, particularly during financial crises, and maintains robust profitability and revenue generation.
Under the leadership of Jamie Dimon, JPMorgan Chase has successfully navigated economic downturns, expanded through strategic acquisitions like Bear Stearns and Washington Mutual, and invested heavily in technology and innovation. These moves have enhanced operational efficiency and customer service.
However, investors should be aware of potential risks, including regulatory challenges, market volatility, and economic uncertainties that could impact the financial sector. While JPMorgan Chase’s strong market position and financial health make it a solid investment, potential investors should consider these risks alongside its many strengths.