The Goldman Sachs Group (NYSE:GS) & JPMorgan Chase & Co. (NYSE:JPM) Critical Analysis

JPMorgan Chase & Co. (NYSE:JPM) and The Goldman Sachs Group (NYSE:GS) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Dividends

JPMorgan Chase & Co. pays an annual dividend of $6.00 per share and has a dividend yield of 1.9%. The Goldman Sachs Group pays an annual dividend of $18.00 per share and has a dividend yield of 1.9%. JPMorgan Chase & Co. pays out 30.0% of its earnings in the form of a dividend. The Goldman Sachs Group pays out 35.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. JPMorgan Chase & Co. has raised its dividend for 15 consecutive years and The Goldman Sachs Group has raised its dividend for 13 consecutive years.

Profitability

This table compares JPMorgan Chase & Co. and The Goldman Sachs Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
JPMorgan Chase & Co.	20.35%	17.16%	1.30%
The Goldman Sachs Group	13.73%	15.19%	0.96%

Risk and Volatility

JPMorgan Chase & Co. has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, The Goldman Sachs Group has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.

Insider & Institutional Ownership

71.6% of JPMorgan Chase & Co. shares are held by institutional investors. Comparatively, 71.2% of The Goldman Sachs Group shares are held by institutional investors. 0.5% of JPMorgan Chase & Co. shares are held by company insiders. Comparatively, 0.6% of The Goldman Sachs Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares JPMorgan Chase & Co. and The Goldman Sachs Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
JPMorgan Chase & Co.	$182.45 billion	4.81	$57.05 billion	$20.01	16.12
The Goldman Sachs Group	$58.28 billion	4.78	$17.18 billion	$51.29	18.12

JPMorgan Chase & Co. has higher revenue and earnings than The Goldman Sachs Group. JPMorgan Chase & Co. is trading at a lower price-to-earnings ratio than The Goldman Sachs Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for JPMorgan Chase & Co. and The Goldman Sachs Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
JPMorgan Chase & Co.	0	13	14	0	2.52
The Goldman Sachs Group	0	15	8	1	2.42

JPMorgan Chase & Co. currently has a consensus price target of $340.18, indicating a potential upside of 5.49%. The Goldman Sachs Group has a consensus price target of $916.86, indicating a potential downside of 1.36%. Given JPMorgan Chase & Co.’s stronger consensus rating and higher probable upside, research analysts clearly believe JPMorgan Chase & Co. is more favorable than The Goldman Sachs Group.

Summary

JPMorgan Chase & Co. beats The Goldman Sachs Group on 12 of the 18 factors compared between the two stocks.

About JPMorgan Chase & Co.

JPMorgan Chase & Co. is a financial holding company, which engages in the provision of financial and investment banking services. It focuses on investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. It operates through the following segments: Consumer and Community Banking (CCB), Commercial and Investment Bank (CIB), Asset and Wealth Management (AWM), and Corporate. The CCB segment originates and services mortgage loans. The CIB segment makes markets and services clients across fixed income, foreign exchange, equities, and commodities. The AWM segment provides initial capital investments in products such as mutual funds and capital invested alongside third-party investors. The Corporate segment manages its liquidity, funding, capital, structural interest rate, and foreign exchange risks. The company was founded in 1799 and is headquartered in New York, NY.

About The Goldman Sachs Group

The Goldman Sachs Group, Inc., a financial institution, provides a range of financial services for corporations, financial institutions, governments, and individuals worldwide. It operates through Global Banking & Markets, Asset & Wealth Management, and Platform Solutions segments. The Global Banking & Markets segment provides financial advisory services, including strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings, and spin-offs; and relationship lending, and acquisition financing, as well as secured lending, through structured credit and asset-backed lending and involved in financing under securities to resale agreements. This segment also offers client execution activities for cash and derivative instruments; credit and interest rate products; and provision of mortgages, currencies, commodities, and equities related products, as well as underwriting services. The Asset & Wealth Management segment manages assets across various classes, including equity, fixed income, hedge funds, credit funds, private equity, real estate, currencies, and commodities; and provides customized investment advisory solutions, wealth advisory services, personalized financial planning, and private banking services, as well as invests in corporate equity, credit, real estate, and infrastructure assets. The Platform Solutions segment offers credit cards and point-of-sale financing for purchase of goods or services. This segment also provides cash management services, such as deposit-taking and payment solutions for corporate and institutional clients. The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered in New York, New York.