JPM Holdings, Inc. (JPM)vs Mastercard Incorporated (MA)

Quick verdict

JPM Holdings, Inc. (JPM) and Mastercard Incorporated (MA) appeal to different investors. On our six-factor framework, JPM scores 5 and MA 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 Mastercard Incorporated 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 1.89 for MA, meaning MA 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 28.34 and 18.62 for MA. Price-to-sales is 16.08 vs 18.02, and free-cash-flow yield is 5.7% vs 0.9%. 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 MA has delivered 9.5% revenue and 8.3% 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. MA posts 14.1%, 43.2% and 9.8% 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

JPM has the safer balance sheet. JPM carries net-debt/EBITDA of 2.62x with a current ratio of 1.89, versus 3.49x and 1.86 for MA. 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 28.9% for MA; on a three-year annualised basis it is 13.8% vs 5.9%. JPM yields 0.0% and MA 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 MA 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: MA
• Quality: JPM

Frequently asked questions

Is JPM or MA the better buy right now?

Neither is universally "better." JPM scores 5 and MA 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 MA?

JPM is the cheaper stock across forward P/E (17.16 vs 28.34), EV/EBITDA (12.83 vs 18.62) and price-to-sales (16.08 vs 18.02).

Which has grown faster, JPM or MA?

JPM has the stronger growth profile, with three-year revenue CAGR of 30.8% for JPM versus 9.5% for MA.

Which stock pays a bigger dividend?

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

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