JPMorgan Chase & Co. (JPM) is growing its regional banking units in California and Florida, competing head to head with the regionals while currently trading at 1.25 times tangible book and engaging in measures to return capital to shareholders, says Moshe Orenbuch, Managing Director at Credit Suisse Group.
“JPMorgan, which has been consistently earning 15% on tangible equity, trades at 1.25 times tangible book, does have an almost 2.5% dividend yield and is buying back stock. I think it has maybe a little less capital return than was approved for in 2012, although we would expect that they will actually do more of it than they did last year, when they had to stop it because of trading issues that they had come to light in April and May,” Orenbuch said.
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Orenbuch says JPM is one of his top stock picks among money center banks, and he highlights the company’s healthy capacity to generate capital through earnings, as well as the regional growth strategy of the bank.
“I would say JPMorgan is interesting because it is actually growing its regional bank. It is building branches in Florida and California and areas that it entered more recently in 2008, 2009 through acquisitions and going head-to-head at a regional bank level. That’s one area,” Orenbuch said.
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