I have large positions in BAC and JPM. On a dividend adjusted basis, JPM is up 37.4% and BAC is up 26.1%. Of course, that performance puts JPM heads and shoulders above BAC.
BAC, since 11/03 when I made my first major purchase after getting hammered by the FFB takeover, on a split adjusted basis, has increased the dividend from 40c quarterly to 56c quarterly, while the JPM dividend hangs at 34c.
Many of the JPM shares I hold are old CMB shares from the 90's and have low basis values.
It would be nice to see the dividend start to rise again. The divies are sure nice frosting to the investment.
EPS needs to reach 1999 levels first, before JPM should raise the Dividens. In share price terms, $55.0 would have to be topped, before JPM should conisder Dividend increase.... give it six more months!!
I too have significant positions in JPM and BAC, at lower prices than todays market. I also like the dividend (and the tax treatment)but, today I started to sell some of my JPM (BAC's x date is this week)and I did so for the following reasons: 1-I would not buy JPM at todays price given the dividend less than 3%. 2-JPM very big player in the retail mortgage business and I am concerned that we are going to see an unhappy ending here as home prices start to fall. 3-The Bank today is being run largly by the Bank One gang. Not really the brain trust to compete with the guys at C and BAC or WB for that mattar. I think they have done a real good job at cost containment but never get the impression that these is a grand plan that somebody is checking off!!
I still like JPM but think that its overbought and there is a chance to take some off table for now and get back in cheaper..
I agree with your sell recommendation 100%. Sell now at $46 and buy back after Q3 earnings come out. Most likely it will be back in the $41 - $42 range.
However I do disagree with your thoughts on strategy. I believe Jamie has a game plan for JPM and we are a year or so away from seeing that put into action. Once he gets cranking the stock should hit $50.
I have confidence in the bank and Dimon. I really have no idea about when a divvie increase will occur. It has been at the current level for a while, as you know as a long term holder. I think I remember you from the FHN board. I think FHN right now is pretty cheap, getting hit hard by this quarter's earnings. As of today's close it yields 4.68%. There is an article that lists its fair value at $52.