JPMorgan Chase Just Authorized a $50 Billion Buyback and Raised Its Dividend. Is the Stock a Buy Near Record Highs?
JPMorgan Chase passed the Fed's bank stress test and is now returning more cash to shareholders, but its valuation is a bit of a worry.
Overview
JPMorgan Chase (NYSE: JPM) is one of the world's largest financial companies, trailing only Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB). That said, the giant bank got some very good news when the Federal Reserve announced that it had passed the Fed's bank stress test. And JPMorgan Chase shareholders benefited, too, since the bank quickly announced a 10% dividend increase and a $50 billion share repurchase plan.
The first big takeaway from the Fed's bank stress test is that JPMorgan Chase is a financially solid bank. Notably, the Fed is looking for a tier 1 capital ratio of 11.5%, but the bank's tier 1 ratio was 14.3%. The tier 1 ratio indicates how well prepared a bank is for adversity, with higher numbers indicating better preparedness. Clearly, JPMorgan Chase is not only one of the largest banks in the world but also among the strongest.
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Originally published at www.fool.com.