Banks pass stress test and reward investors

Article Excerpt

J.P. MORGAN CHASE & CO. $115 (New York symbol JPM; Income Portfolio, Finance sector; Shares outstanding: 3.4 billion; Market cap: $391.0 billion; Price-to-sales ratio: 4.0; Dividend yield: 2.8%; TSINetwork Rating: Average; www.jpmorganchase.com) earned $8.3 billion in the quarter ended June 30, 2018. That’s up 18.3% from $7.0 billion a year earlier. Due to fewer shares outstanding, per-share earnings jumped 25.8%, to $2.29 from $1.82. Revenue rose 6.5%, to $28.4 billion from $26.7 billion. Despite higher interest rates, Morgan continues to see strong demand for new consumer loans and credit cards. It also continues to benefit from higher earnings at its corporate financing and wealth management businesses. As well, recent U.S. tax reform cut its effective tax rate in the quarter to 21.3% from 27.9% a year earlier. Morgan set aside $1.21 billion in the quarter to cover potentially bad loans. That’s down 0.4% from $1.22 billion a year earlier. The bank passed the U.S. Federal Reserve’s latest stress test. It measures how financial firms would…

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