HomeMost PopularInvestingShould You Watch JPMorgan (JPM) for a Higher Dividend?

Should You Watch JPMorgan (JPM) for a Higher Dividend?

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JPMorgan (JPM) recently announced a 5% increase in its quarterly dividend to $1.05 per share, following the clearance of the 2023 stress test. Investors who hold JPMorgan shares on or before October 6th will receive the dividend payout on October 31st.

Prior to this increase, JPMorgan had maintained its dividend at $1 per share despite passing the stress test in 2022. The company cited higher future capital requirements and macroeconomic uncertainties as reasons for keeping the dividend unchanged.

With the current closing price of $145.93, JPMorgan’s dividend yield (based on the increased dividend) is at 2.68%. This presents an attractive steady income stream for investors.

In addition to the dividend increase, JPMorgan has implemented a share repurchase plan. The company plans to buy back shares worth $12 billion this year, demonstrating its commitment to returning value to shareholders.

JPMorgan’s healthy balance sheet position is further reinforced by its strategic acquisitions. Both domestic and international acquisitions have contributed to the company’s financial strength. For example, JPMorgan recently increased its stake in Brazil’s C6 Bank and formed a strategic alliance with Cleareye.ai, a financial technology firm. The company also acquired First Republic Bank, a failed bank, which is expected to result in revenue synergies and boost net interest income (NII). JPMorgan projects NII to be approximately $87 billion in 2023.

Furthermore, JPMorgan is expanding its footprint by opening branches in new regions. This expansion will help the company seize cross-selling opportunities in the card and auto loan sectors. Additionally, JPMorgan launched its digital retail bank, Chase, in the U.K. in 2021 and plans to expand it across the European Union.

Despite near-term challenges such as volatile fee income and weakening asset quality, JPMorgan is expected to remain financially stable due to these factors.

Other Banks That Increased Dividends

Fifth Third Bancorp (FITB) announced a 6% increase in its quarterly cash dividend to 35 cents per share, marking the eighth consecutive year of dividend hikes by the company.

Capital City Bank Group Inc. (CCBG) raised its quarterly cash dividends by 11.1%, continuing its trend of dividend increases over the past five years.

Investors interested in exploring more investment recommendations can download the free report, β€œ7 Best Stocks for the Next 30 Days,” from Zacks Investment Research.

Disclosure: The author holds no positions in any stocks mentioned in this article.

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