With all four of the nation's biggest banks having reported fourth-quarter earnings, investors can now get a sense for which bank's stock is the best buy now. On one end of the spectrum is Citigroup (NYSE: C), which struggled last quarter but trades for the lowest multiple to book value of its peer group. On the other end is JPMorgan Chase (NYSE: JPM), which just eclipsed Wells Fargoto be the most profitable multitrillion bank in the country, but trades for a much higher multiple.
To learn more about which of these is the better buy today, listen in to the segment below of this week's episode of Industry Focus: Financials, in which The Motley Fool's Michael Douglass and contributor John Maxfield discuss whether bank investors should be looking for quality or value right now.
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A full transcript follows the video.
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This podcast was recorded on Jan. 23, 2017.
Michael Douglass:We're an investing podcast, so if you had to pick one of the big four we talked about today -- that'sBank of America, Citigroup, Wells Fargo, and JPMorgan --if you had to pick one right now as your favorite big bank stock, which would it be?
John Maxfield:I would have to say --it's tempting to say that Citigroup is because the value of the stock is so low. But the problem with Citigroup is -- and we detailed this earlier in the show -- is that it's going to struggle going forward,particularly, to get back to the policy question,if the presidential administration goes ina protectionist direction,because Citigroup is such an internationally focused bank,that could really impact it. So,even though Citigroup is the cheapest,I don't think that's the direction that I would go in as an investor. Thedirection I would go in as an investorat this point is JPMorgan Chase. Again, tothe point we made earlier, because thevalue of that franchise ... as these interest rates come up,and assuming that they do, the value of thatfranchise is really going to come through. And it is now, as of the fourth quarter, the most profitable multi-trillion dollar bank in the quarter. And going forward, I just don't see that trend abating at all.
Douglass:Good thing to end on...always like to end on a high note.
John Maxfield owns shares of Bank of America and Wells Fargo. Michael Douglass has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.