JPMorgan Chase (JPM -1.31%) reported decent quarterly results but hinted that investors who are waiting for the operating environment to improve need to continue to be patient.
Investors largely shrugged at the news, sending JP Morgan shares down as much as 3% on the day and down 1% as of 1:30 p.m. EDT.
Solid quarter, subdued outlook
JPMorgan is among the largest U.S. banks and there are few companies that investors follow more closely to gauge the overall health of the economy. The bank earned $4.40 per share in the second quarter on revenue of $51 billion, topping Wall Street expectations for $4.28 per share in earnings on sales of $50.2 billion.
The results got a $7.9 billion -- or about $2.04 per share -- boost thanks to a share exchange deal with Visa. Investment banking fees climbed 50% year over year, and equity trading revenue grew by 21%.
CEO Jamie Dimon praised the bank's performance, but said he remains cautious about the quarters to come.
"While market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks," Dimon said. "These tail risks are the same ones that we have mentioned before."
The CEO listed fiscal deficits, inflation, and "potentially the most dangerous" geopolitical situation since World War II as concerns.
Is JPMorgan Chase stock a buy?
Dimon might be worried about the future, but there are few CEOs better equipped to handle whatever lies ahead. JPMorgan is a massive, well-diversified institution with significant capital reserves and exposure to all aspects of the U.S. economy.
Investors buying in today are unlikely to see technology-like stock returns, but this is a stock that should allow you to sleep well at night and deliver slow, reliable growth along with a dividend that currently yields more than 2%. For income-oriented investors and those looking for ballast, JP Morgan remains a solid choice.
