JPMorgan Chase Trades at a Big Premium to Bank of America. Is It Worth the Difference?
There is more than meets the eye with these enormous banks.
JPMorgan Chase Trades at a Big Premium to Bank of America. Is It Worth the Difference?
Overview
JPMorgan Chase (NYSE: JPM) is a driving force of the broader economy. And the gigantic bank has been a huge winner thanks to strong fundamental performance. During the past decade, its shares have generated a total return of 527% (as of June 8). That gain comes up well ahead of smaller rival Bank of America (NYSE: BAC), whose shares delivered a total return of 369% during the same time.
From the market's perspective, investors might struggle to find differences between these two companies. After all, they each have a meaningful presence in different areas of the financial services sector.
Details
But JPMorgan Chase trades at a price-to-book (P/B) ratio of 2.4, representing a sizable 71% premium to Bank of America's 1.4 multiple. What's causing this large valuation gap? And does it tell us anything about the investment implications of these two financial stocks?
Source
Originally published at www.fool.com.
