Which Is a Better Investment, JPMorgan Chase & Co or Wells Fargo & Co Stock? (2024)

Sifting through countless of stocks in the Banks industry can be tedious, and sometimes two stocks are just too similar to judge which is the better investment. If you’re on the fence about investing in JPMorgan Chase & Co or Wells Fargo & Co because you’re not sure how they measure up, it’s important to compare them on a few factors before making your decision.

Read on to learn how JPMorgan Chase & Co and Wells Fargo & Co compare based on key financial metrics to determine which better meets your investment needs.

JPMorgan Chase & Co. is a financial holding company. It has four segments: Consumer & Community Banking (CCB), Corporate & Investment Bank (CIB), Commercial Banking (CB), and Asset & Wealth Management (AWM). CCB segment offers products and services to consumers and small businesses through bank branches, ATMs, digital (including mobile and online) and telephone banking. CIB segment consists of banking and markets and securities services, and offers a suite of investment banking, market-making, prime brokerage, lending, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, merchants, government and municipal entities. CB segment provides financial solutions, including lending, payments, investment banking and asset management products across three primary client segments: Middle Market Banking, Corporate Client Banking and Commercial Real Estate Banking. AWM segment offers investment and wealth management solutions.

Wells Fargo & Company is a financial services company. It provides a diversified set of banking, investment and mortgage products and services, and consumer and commercial finance, through banking locations and offices, the Internet (www.wellsfargo.com) and other distribution channels to individuals, businesses and institutions in all 50 states, the District of Columbia and in countries outside the United States. Its segments include Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking, and Wealth and Investment Management. The Wealth and Investment Management segment provides personalized wealth management, brokerage, financial planning, lending, private banking, trust and fiduciary products and services to affluent, high-net worth and ultra-high-net worth clients. Commercial Banking products and services include banking and credit products across multiple industry sectors and municipalities, secured lending and lease products, and treasury management.

As of May 17, 2024, JPMorgan Chase & Co had a $581.4 billion market capitalization, compared to the Banks median of $309.1 million. JPMorgan Chase & Co’s stock is NA in 2024, NA in the previous five trading days and up 47.92% in the past year.

Currently, JPMorgan Chase & Co’s price-earnings ratio is 12.4. JPMorgan Chase & Co’s trailing 12-month revenue is $181.0 billion with a 26.8% net profit margin. Year-over-year quarterly sales growth most recently was 28.2%. Analysts expect adjusted earnings to reach $16.150 per share for the current fiscal year. JPMorgan Chase & Co currently has a 2.2% dividend yield.

Currently, Wells Fargo & Co’s price-earnings ratio is 12.7. Wells Fargo & Co’s trailing 12-month revenue is $88.6 billion with a 19.8% net profit margin. Year-over-year quarterly sales growth most recently was 18.0%. Analysts expect adjusted earnings to reach $5.042 per share for the current fiscal year. Wells Fargo & Co currently has a 2.3% dividend yield.

Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movements. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors streamline and work through such data.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A‐F grades for each of five key investing factors: value, growth, momentum, earnings estimate revisions and quality. Here, we’ll take a closer look at JPMorgan Chase & Co and Wells Fargo & Co’s stock grades to see how they measure up against one another.

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The foundation of growth investing is seeking out stocks of companies exhibiting strong, consistent and prolonged growth that is expected to continue into the future.

In order to compute the growth score and assign it a letter grade, the percentile ranks for each of three components‐consistency of annual sales growth, five-year sales growth rankings adjusted for extreme levels, and consistency of positive annual cash from operations‐must be determined. These three rank figures are added together, and the sum is ranked against the entire stock universe to arrive at a company’s Growth Score to create an equal distribution of grades.

The companies in the bottom 20% of the stock universe receive Growth Grades of F, considered to be very weak, while those in the top 20% receive A grades, which are considered very strong.

JPMorgan Chase & Co has a Growth Score of 67, which is Strong. Wells Fargo & Co has a Growth Score of 74, which is Strong.

Looking at the Growth Grade breakdown above, both JPMorgan Chase & Co and Wells Fargo & Co have a grade of B. For investors who focus solely on a company’s upward growth, further research should be conducted into both companies’ other financial metrics before deciding whether to invest.

Momentum grades help to uncover stocks experiencing anomalously high rates of return; research finds that stocks with high relative levels of momentum tend to outperform, whereas those with low levels of momentum tend to continue underperforming. Momentum is based on the price change of a stock over a specified period relative to all other stocks.

Typically, AAII looks at the weighted relative strength over the trailing four quarters. The weighted four-quarter relative strength rank is the relative price change for each of the past four quarters. The most recent quarterly price change is given a weight of 40% and each of the three previous quarters are given a weighting of 20%.

JPMorgan Chase & Co has a Momentum Score of 78, which is Strong. Wells Fargo & Co has a Momentum Score of 81, which is Very Strong.

Earnings estimate revisions scores consider the magnitude of a company’s earnings surprise in its last two reported fiscal quarters. Often, positive surprises beget further positive surprises‐or at least continued sales growth (the exact opposite is generally true, too).

Estimate revisions offer an indication of what analysts are thinking about the short-term prospects of a firm. Estimate revisions are based on the statistical significance of a firm’s last two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months.

JPMorgan Chase & Co has a Earnings Estimate Score of 44, which is Neutral. Wells Fargo & Co has a Earnings Estimate Score of 44, which is Neutral.

Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection. Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point.

AAII’s A+ Investor Quality Grade comes from the ranking of key metrics. Specifically, the quality grade is the percentile rank of the composite of return on assets (ROA), return on invested capital (ROIC), gross profit relative to assets, buyback yield, change in total liabilities to assets, accruals, Z double prime bankruptcy risk (Z) score and F-Score.

These 2 key factors, when combined with the above, provide a holistic view into a particular stock. Further, by joining A+ Investor you can see whether JPMorgan Chase & Co and Wells Fargo & Co pass any of our 60+ stock screens that have outperformed the market since their creation.

Overall, JPMorgan Chase & Co stock has a Growth Score of 67, Momentum Score of 78 and Estimate Revisions Score of 44.

Wells Fargo & Co stock has a Growth Score of 74, Momentum Score of 81 and Estimate Revisions Score of 44.

Comparing JPMorgan Chase & Co and Wells Fargo & Co’s grades, scores and metrics can act as a solid basis to determine whether they may be a good investment or not. You’ll also want to look at your portfolio’s asset allocation as well as your risk tolerance and financial goals to see if either of these stocks would make a good fit for you. AAII can help you figure out which investments align with your individual needs and preferences.

Investors are encouraged to do their own due diligence and research. In this way, individuals can effectively become managers of their own assets‐without having to rely on others for financial independence. You can count on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis.

A+ Investor adds to our qualitative teaching with a powerful data suite to help you whittle down investment choices to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.