30-Second Overview: JPMorgan Chase

You need serious courage to jump into bank stocks these days. Real estate, derivatives, CDOs, auction rate securities, bank runs ... the list of potential boogeymen is lengthy. These companies basically have nothing going in their favor right now.

Many investors see no light at the end of this particular tunnel. But some banks never ventured into the tunnel in the first place. Although it's hardly unscathed, JPMorgan Chase (NYSE: JPM  ) likely fits that mold.

Here are some quick numbers that should prove beneficial when analyzing the House of Morgan.

Metric

Trailing 12 months

Total revenue

$68.8 billion

Total net income

$10.7 billion

Net income per share

$3.05

Dividends paid per share

$1.52

Current share price*

$38

*As of Aug. 14, 2008.

In 1907, J.P. Morgan (the man) single-handedly stepped in to avert an all-out financial crisis. Just more than a century later, JPMorgan (the company) stepped in to avert another pandemonium by adopting Bear Stearns. Since it paid just a token fee for Bear, and it has the Federal Reserve financing the riskiest loans, the potential upside for JPMorgan is enormous. Merely integrating a few choice assets, like Bear's prime brokerage unit and the rolodexes of some of its coveted investment bankers, could be worth a fortune.

Metric

Most recent quarter

Return on assets

0.48%

Return on equity

6%

Net interest margin

2.63%

Nonperforming loans to average loans

0.32%

Tier 1 capital ratio

9.1%

Book value per share

$37.02

Another wild card is how JPMorgan Chase navigate the treacherous real estate market. Earlier this year, it made a failed attempt to acquire Washington Mutual (NYSE: WM  ) . Now that WaMu is sticking to the toddler philosophy of "I can do it all by myself," some have pointed to SunTrust (NYSE: STI  ) and Sovereign Bancorp (NYSE: SOV  ) as possible takeover targets on JPMorgan's list.

JPMorgan has not only proved it can withstand the credit crisis, but that it's destined to capitalize on it like no other. Bear Stearns' acquisition allows it close the investment banking gap with Goldman Sachs (NYSE: GS  ) . If it can pull off an equally impressive acquisition of a real-estate-heavy bank, current lending leaders like Wells Fargo (NYSE: WFC  ) and Bank of America (NYSE: BAC  ) could get a serious run for their money.

For related banking Foolishness:

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. JPMorgan Chase and Bank of America are Motley Fool Income Investor recommendations. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.


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