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The Future Of JPMorgan's Dividend

Published Tue, 15 Sep 2020 13:13:47 -0400 on Seeking Alpha

Seeking AlphaDividend Ideas | Financials The Future Of JPMorgan's DividendSep. 15, 2020 1:13 PM ET|| About: JPMorgan Chase & Co. (JPM), Includes: BAC, C, WFCby: Tariq DennisonTariq Dennison Long Run IncomeRobust income-increasing ideas tested through timeSummaryJPMorgan is currently one of only five bank stocks I hold directly and my largest position in any of my former employers.
JPMorgan's quarterly dividend of $0.90 is over double the $0.38 level from which it was last cut to $0.05 in the 2008-2009 financial crisis.
So far, there seems to be no sign of a dividend cut in the wake of this current crisis, so long as it meets upcoming EPS estimates of $1.70-2.00.
Low funding costs and diverse sources of yield are likely to help JPM get its return on asset rate back above 1% and possibly support a dividend increase next year.
In this article, I show a series of charts going back to JPM's 2000 merger with Chase, and try and project forward where the company might go over the next 20 years.
Of all of my former employers from which I have received stock-based compensation, the one in which I continue to retain the largest position is JPMorgan Chase & Co. (JPM). As outlined in my "20 Stocks For 20 Years" article, JPM was never a stock I purchased deliberately, but rather one that came to me when JPM acquired my longer-term employer, Bear Stearns, in 2008. Although I sold most of my shares after vesting, I decided to retain a significant number of my shares because of how impressed I was by JPM's organization compared with the other firms I have worked for over the years. In the rest of my portfolio, I am also relatively cautious with financials as a sector due to the magnitude of leverage and valuation challenges, but of the bank stocks I own, JPM continues to pass my checklists despite its complexity.
All charts in this article start on January 1st, 2001, shortly after the merger with Chase Manhattan Bank.
When looking at the long-term... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
WELLS FARGO 48.65   10.0 4.84 2.04 4.22
CITIGROUP 69.30   9.6 7.19 2.04 2.96
BANK OF AMERICA 29.67   10.6 2.80 0.72 2.45


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