JPM Holdings, Inc. (JPM)vs BAC Holdings, Inc. (BAC)

Quick verdict

JPM Holdings, Inc. (JPM) and BAC Holdings, Inc. (BAC) appeal to different investors. On our six-factor framework, JPM scores 5 and BAC scores 1. JPM looks cheaper on the multiples that matter, while JPM grows faster and JPM earns higher returns on capital. Overall, JPM edges this comparison, but the right pick depends on whether you prioritise value, growth, income or balance-sheet safety.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

JPM Holdings, Inc. operates in Drug Manufacturers (Healthcare), while BAC Holdings, Inc. sits in Credit Services (Financial Services). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. JPM carries a beta of 0.62 versus 1.01 for BAC, meaning BAC has historically been the more volatile of the two.

Valuation

On valuation, JPM is the cheaper stock. JPM trades on a forward P/E of 17.16 and EV/EBITDA of 12.83, against 35.22 and 6.53 for BAC. Price-to-sales is 16.08 vs 17.25, and free-cash-flow yield is 5.7% vs 3.4%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

JPM is the faster grower. JPM has compounded revenue at 30.8% over three years with EPS growth of 18.8%, while BAC has delivered 21.7% revenue and 17.8% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, JPM is stronger. JPM posts a 40.6% operating margin, 32.2% return on equity and 17.4% return on invested capital. BAC posts 38.4%, 30.9% and 10.0% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

BAC has the safer balance sheet. JPM carries net-debt/EBITDA of 2.62x with a current ratio of 1.89, versus 0.15x and 0.91 for BAC. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year JPM returned 116.8% against 80.7% for BAC; on a three-year annualised basis it is 13.8% vs 2.9%. JPM yields 0.0% and BAC yields 0.0%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, JPM is the better fit on today's multiples. Growth investors will likely prefer JPM, which is expanding faster. Income investors should lean toward JPM for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour JPM for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: JPM
• Growth: JPM
• Income: JPM
• Quality: JPM

Frequently asked questions

Is JPM or BAC the better buy right now?

Neither is universally "better." JPM scores 5 and BAC scores 1 on our six-factor framework. JPM is cheaper, JPM grows faster, and JPM is higher quality — so the right pick depends on your objective.

Which stock is cheaper, JPM or BAC?

JPM is the cheaper stock across forward P/E (17.16 vs 35.22), EV/EBITDA (12.83 vs 6.53) and price-to-sales (16.08 vs 17.25).

Which has grown faster, JPM or BAC?

JPM has the stronger growth profile, with three-year revenue CAGR of 30.8% for JPM versus 21.7% for BAC.

Which stock pays a bigger dividend?

JPM yields 0.0% and BAC yields 0.0%, so JPM is the stronger income choice.

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