Unveiling JPMorgan Chase & Co's Dividend Performance: A Deep Dive Analysis
Understanding the Sustainability and Growth Prospects of JPMorgan Chase & Co's Dividend
JPMorgan Chase & Co(NYSE:JPM) recently announced a dividend of $1.05 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-05. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into JPMorgan Chase & Cos dividend performance and assess its sustainability.
What Does JPMorgan Chase & Co Do?
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JPMorgan Chase is one of the largest and most complex financial institutions in the United States, with nearly $4 trillion in assets. It is organized into four major segments--consumer and community banking, corporate and investment banking, commercial banking, and asset and wealth management. JPMorgan operates, and is subject to regulation, in multiple countries.
A Glimpse at JPMorgan Chase & Co's Dividend History
JPMorgan Chase & Co has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. JPMorgan Chase & Co has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down JPMorgan Chase & Co's Dividend Yield and Growth
As of today, JPMorgan Chase & Co currently has a 12-month trailing dividend yield of 2.79% and a 12-month forward dividend yield of 2.93%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, JPMorgan Chase & Co's annual dividend growth rate was 5.60%. Extended to a five-year horizon, this rate increased to 12.90% per year. And over the past decade, JPMorgan Chase & Co's annual dividends per share growth rate stands at an impressive 13.70%.
Based on JPMorgan Chase & Co's dividend yield and five-year growth rate, the 5-year yield on cost of JPMorgan Chase & Co stock as of today is approximately 5.12%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, JPMorgan Chase & Co's dividend payout ratio is 0.26.
JPMorgan Chase & Co's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks JPMorgan Chase & Co's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. JPMorgan Chase & Co's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and JPMorgan Chase & Co's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. JPMorgan Chase & Co's revenue has increased by approximately 6.50% per year on average, a rate that outperforms than approximately 52.11% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, JPMorgan Chase & Co's earnings increased by approximately 4.10% per year on average, a rate that outperforms than approximately 35.36% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 14.30%, which outperforms than approximately 69.67% of global competitors.
Next Steps
Considering JPMorgan Chase & Co's consistent dividend payments, impressive dividend growth rate, prudent payout ratio, solid profitability, and robust growth metrics, it appears to be a promising dividend stock. However, investors should continue to monitor these factors over time to ensure the sustainability of dividends. Remember, the past performance is not indicative of future results, and it's crucial to carry out a comprehensive analysis before making investment decisions.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
