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Category: Goldman Sachs (GS), Citigroup (C), JPMorgan (JPM) and Bank of America (BAC)
Date: 16 October 2020 Stock price of Goldman: $206.21 Stock price of Citigroup: $43.19 Stock price of JPMorgan: $101.51 Stock price of Bank of America: $24.24 In our latest battle of the banks we compare the stock performance and latest quarterly results of Bank of America (BAC), Goldman Sachs (GS), JPMorgan Chase (JPM) and Citigroup (C). Which stock is best positioned for future growth and whose stock has been the best performer over the last 5 years?
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Despite the challenges of the COVID-19 global pandemic, we were still able to achieve a strong start to the year "
More About Bank of America (BAC)
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 66 million consumer and small business clients with approximately 4,300 retail financial centers, including approximately 2,800 lending centers, 2,600 financial centers with a Consumer Investment Financial Solutions Advisor and 2,000 business centers; approximately 16,800 ATMs; and awardwinning digital banking with approximately 38 million active users, including approximately 29 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
Latest earnings report overview
Latest earnings report overview
- Total revenue: $20.336 billion (down from $22.807 billion for the same period of the previous year)
- Total revenue decreased by -10.8% over the last 12 months
- Total noninterest expenses: $14.401 billion (down from $15.169 billion for the same period of the previous year)
- Total noninterest expenses decreased by -5.1% over the last 12 months
- Net income: $4.881 billion (down from $5.77 billion for the same period of the previous year)
- Diluted earnings per share: $0.51 (down from $0.56 for the same period of the previous year)
- PE ratio of Bank of America: 13.9
- Dividend yield of Bank of America: 3.1%
- Diluted weighted-average shares outstanding: 8.777 billion (down from 9.353 billion for the same period of the previous year)
- Book value per share: $28.33 (up from $26.96 for the same period of the previous year)
- Cash and cash equivalents: $32.922 billion
- Cash and cash equivalents per share: $3.75
- Cash and cash equivalents makes up 15.9% of Bank of America's market capital
- Cash and cash equivalents makes up 1.2% of Bank of America's total assets
- Cash and cash equivalents per share: $3.75
- Loans net of allowances for losses: $935.576 billion
- Loans net of allowances makes up 34.1% of Bank of America's total assets
- Goodwill: $68.951 billion
- Goodwill makes up 2.5% of Bank of America's total assets
- Goodwill per stock: $7.86
- Stockholders equity in Bank of America: $268.850 billion
- Stockholders equity per share: $30.6
- So Bank of America is trading a 0.77 times its stockholders equity which is well outside the expected range of between 2 and 4 which most firms tend to trade at.
- Stockholders equity per share: $30.6
More About Goldman Sachs (GS)
The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.
Latest earnings report overview
Latest earnings report overview
- Revenue: $10.781 billion (down from $8.323 billion for the same period of the previous year)
- Revenues decreased by 30% over the last 12 months
- Total operating expenses: $5.954 billion (up from $5.616 billion for the same period of the previous year)
- Operating costs and expenses increased by 6% over the last 12 months
- Some margin gains on Goldman Sachs as their revenues increased at a lot faster than their operating expenses
- Net income: $3.484 billion (up from $2.182 billion for the same period of the previous year)
- Net income increased by 94% over the last 12 months
- Diluted earnings per share: $9.68 (down from $4.79 for the same period of the previous year)
- PE ratio of Goldman Sachs: 9.8
- Diluted weighted-average shares outstanding: 359.9 million (down from 374.4 million for the same period of the previous year)
- Cash and cash equivalents: $153 billion
- Cash per share: $425
- Cash as percentage of Goldman Sachs stock price: 204%
- Book value per share: $356
- Loans net of allowances for losses: $112 billion
- Loans net of allowances for losses 9.8% of Goldman Sachs total assets
- Stockholders equity in Goldman Sachs: $93 billion
- Stockholders equity per share: $258.4
- So Goldman Sachs is trading a 0.82 times its stockholders equity which is outside the expected range of between 2 and 4 which most firms tend to trade at.
- Stockholders equity per share: $258.4
More About JPMorgan Chase (JPM)
JPMorgan Chase (NYSE: JPM) is one of the oldest financial institutions in the United States. With a history dating back over 200 years, here's where we stand today:
We are a leading global financial services firm with assets of $2.6 trillion.
We have a presence in over 100 markets.
We have over 250,000 employees.
We serve millions of consumers, small businesses and many of the world's most prominent corporate, institutional and government clients.
We are a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management.
Our stock is a component of the Dow Jones Industrial Average.
Overview of their latest quarterly earnings
We are a leading global financial services firm with assets of $2.6 trillion.
We have a presence in over 100 markets.
We have over 250,000 employees.
We serve millions of consumers, small businesses and many of the world's most prominent corporate, institutional and government clients.
We are a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management.
Our stock is a component of the Dow Jones Industrial Average.
Overview of their latest quarterly earnings
- Revenue: $29.147 billion (up from $29.481billion for the same period of the previous year)
- Revenues remained basically unchanged over the last 12 months
- Total non interest expenses: $16.875 billion (up from $16.372 billion for the same period of the previous year)
- Total non interest expenses increased by 3% over the last 12 months
- Some margin squeeze for JP Morgan as their revenues increased a lot more than their non interest expenses
- Net income: $9.443 billion (down from $9.080 billion for the same period of the previous year)
- Net income decreased by 4% over the last 12 months
- Diluted earnings per share: $2.92 (up from $2.68 for the same period of the previous year)
- PE ratio of JP Morgan Chase: 9.2
- Dividend declared: $0.90
- Dividend yield: 3.6%
- Diluted weighted-average shares outstanding: 3.082 billion (down from 3.207 billion for the same period of the previous year)
- Book value per share: $79.08 (up 5% from $75.24 for the same period of the previous year)
- Cash and cash equivalents: $20.816 billion
- Cash and cash equivalents per share: $6.75
- Cash and cash equivalents makes up 6.7% of JP Morgan Chase's market capital
- Cash and cash equivalents makes up 0.64% of JP Morgan Chase's total assets
- Cash and cash equivalents per share: $6.75
- Loans net of allowances for losses: $958.926 billion
- Loans net of allowances for losses 29.5% of JP Morgan Chase's total assets
- Goodwill: $51.594 billion
- Goodwill makes up 1.62% of JP Morgan Chase's total assets
- Goodwill per stock: $16.74
- Stockholders equity in JP Morgan Chase: $271.113 billion
- Stockholders equity per share: $87.96
- So JP Morgan Chase is trading a 1.1 times its stockholders equity which is outside the expected range of between 2 and 4 which most firms tend to trade at.
- Stockholders equity per share: $87.96
More About Citi
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.
Overview of their latest quarterly earnings report
Overview of their latest quarterly earnings report
- Revenue: $17.302 billion (up from $17.758billion for the same period of the previous year)
- Revenues decreased by -7% over the last 12 months
- Operating costs and expenses : $10.964 billion (up from $10.464 billion for the same period of the previous year)
- Operating costs and expenses increased by 5% over the last 12 months
- Net income: $3.230 billion (down from $4.913 billion for the same period of the previous year)
- Diluted earnings per share: $1.40 (down from $2.07 for the same period of the previous year)
- PE ratio of Citigroup: 7.8
- Diluted weighted-average shares outstanding: 2.094 billion (down from 2.237 billion for the same period of the previous year)
- Book value per share: $84.48 (up 4% from $81.02 for the same period of the previous year)
- Cash and cash equivalents: $25.308 billion
- Cash and cash equivalents per share: $12.08
- Cash and cash equivalents makes up 27.11% of Citigroup's market capital
- Cash and cash equivalents makes up 1.13% of Citigroup's total assets
- Cash and cash equivalents per share: $12.08
- Loans net of allowances for losses: $640.485 billion
- Loans net of allowances makes up 28.7% of Citigroup's total assets
- Goodwill: $21.399 billion
- Goodwill makes up 0.97% of Citigroup's total assets
- Goodwill per stock: $10.21
- Goodwill makes up 0.97% of Citigroup's total assets
- Stockholders equity in Citigroup: $194.595 billion
- Stockholders equity per share: $92.92
- So Citigroup is trading a 0.47 times its stockholders equity which is well outside the expected range of between 2 and 4 which most firms tend to trade at.
- Stockholders equity per share: $92.92
Bank of America (BAC) vs Goldman Sachs (GS) vs JPMorgan (JPM) vs Citigroup (C)
The image below shows the stock price performance of Bank of America (BAC), Goldman Sachs (GS), JPMorgan Chase (JPM), Citigroup (C) over the last 5 years. All of these firms are active in the banking and financial services sector in the USA. And their stock price trends look very similar, but the stock price returns are however very different. The summary below shows the stock price returns of the four mentioned firms over the last 5 years, sorted from best to worst performer
JPMorgan was by far the best performer and Citigroup by far the worst.
- JPMorgan Chase (JPM): 54.1%
- Bank of America (BAC): 39.03%
- Goldman Sachs (GS): 8.21%
- Citigroup (C): -18.4%
JPMorgan was by far the best performer and Citigroup by far the worst.
Financial metrics comparison of the big banks
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following:
Based on this metric CitiGroup offers far more value than Bank of America, JPMorgan and Goldman Sachs. Most firms tend to trade at a ratio of between 2 and 4 times. While all these firms are trading at well below the expected range its Citi who is trading at the lowest and based on this metric offers the most value.
Next up cash as percentage of stock price:
Next up lets take a look at the percentage cash on the balance sheet makes up of each group's total assets:
Looking at the cash position of the four firms Goldman Sachs has the strongest cash position (as a percentage of their total assets). The cash per share gives an indication of if investors were to buy the stock now, how much of that stock price is made up by cash on their balance sheet. In this case its also Goldman Sachs that comes out on top with almost 204% of their current stock price being made up by cash.
Lastly the overused but still useful metric, the Price to Earnings Ratio (PE):
So Citigroup has the lowest PE and Bank of America by far the highest.
So all things considered if we have to choose between all of these financial service provider firms based on their current stock price, their latest earnings reported and stock price performance provided over the last 5 years, we rate the stock of Goldman Sachs as the Winner as its PE is middle of the road of these firms, it has the strongest cash position of the four firms and its Price/Stockholders equity is middle of the road. And in uncertain economic times we tend to favour those with the strongest cash positions as it provides a greater buffer to ride out difficult times. We therefore rate Goldman Sachs as the WINNER
- Price/Stockholders equity per share for CitiGroup: 0.47
- Price/Stockholders equity per share for JP Morgan : 1.1
- Price/Stockholders equity per share for Bank of America: 0.77
- Price/Stockholders equity per share for Goldman Sachs : 0.82
Based on this metric CitiGroup offers far more value than Bank of America, JPMorgan and Goldman Sachs. Most firms tend to trade at a ratio of between 2 and 4 times. While all these firms are trading at well below the expected range its Citi who is trading at the lowest and based on this metric offers the most value.
Next up cash as percentage of stock price:
- Cash as percentage of stock price for CitiGroup: 27.1%
- Cash as percentage of stock price for JP Morgan : 6.7%
- Cash as percentage of stock price for Bank of America: 15.9%
- Cash as percentage of stock price for Goldman Sachs: 204%
Next up lets take a look at the percentage cash on the balance sheet makes up of each group's total assets:
- Cash as percentage of stock price for CitiGroup: 1.13%
- Cash as percentage of stock price for JP Morgan : 0.64%
- Cash as percentage of stock price for Bank of America: 1.2%
- Cash as percentage of stock price for Goldman Sachs: 13.5%
Looking at the cash position of the four firms Goldman Sachs has the strongest cash position (as a percentage of their total assets). The cash per share gives an indication of if investors were to buy the stock now, how much of that stock price is made up by cash on their balance sheet. In this case its also Goldman Sachs that comes out on top with almost 204% of their current stock price being made up by cash.
Lastly the overused but still useful metric, the Price to Earnings Ratio (PE):
- PE for CitiGroup: 7.8
- PE for JP Morgan : 9.2
- PE for Bank of America: 13.9
- PE for Goldman Sachs: 9.8
So Citigroup has the lowest PE and Bank of America by far the highest.
So all things considered if we have to choose between all of these financial service provider firms based on their current stock price, their latest earnings reported and stock price performance provided over the last 5 years, we rate the stock of Goldman Sachs as the Winner as its PE is middle of the road of these firms, it has the strongest cash position of the four firms and its Price/Stockholders equity is middle of the road. And in uncertain economic times we tend to favour those with the strongest cash positions as it provides a greater buffer to ride out difficult times. We therefore rate Goldman Sachs as the WINNER
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