JPMorgan Chase (JPM) vs Bank of America (BAC): the numbers side by side
By Lubin Danilo, founder of Lubin Investment
On our 10 quality criteria, Bank of America comes out ahead. On price, JPMorgan Chase trades cheapest relative to its free cash flow. In other words, comparing JPMorgan Chase and Bank of America means answering two separate questions, and they do not necessarily have the same answer.
Both stocks side by side
| Metric | JPMorgan Chase (JPM) | Bank of America (BAC) |
|---|---|---|
| Quality score | 6/10 | 7/10 |
| P/FCF | not available | 3.9× |
| Sector | Banks Diversified | Banks Diversified |
| Price | 331.43 USD | 51.39 USD |
| Market cap | 892.9B | 374.8B |
Quality: which one passes more criteria
Bank of America passes 7/10 of our quality criteria, against 6/10 for JPMorgan Chase. The criteria are identical for both: profitability, revenue and free cash flow per share growth, share count control, revenue per employee growth, margin expansion, return on capital, debt, conversion of earnings into cash, and cash conversion cycle. No weighting, no opinion: it is a count.
Price: which one is cheaper
The P/FCF multiple cannot be computed for one of the two stocks, for lack of usable free cash flow. The price comparison is therefore incomplete, and only quality is comparable here.
JPMorgan Chase's accounts are public: 10-K filings with the SEC (EDGAR).
Bank of America's accounts are public: 10-K filings with the SEC (EDGAR).
How to decide
There is no "better stock" in the abstract, there is a better stock for a given goal. If you want the most solid financial quality, follow the score. If you want to pay the least for the cash produced, follow the P/FCF. If both point to the same name, the case is simple. If they diverge, you are trading off paying more for a better business against paying less for a more questionable one. The two detailed pages below give the criterion-by-criterion breakdown for JPMorgan Chase and for Bank of America.
Frequently asked questions
Should you buy JPMorgan Chase or Bank of America?
Bank of America passes 7/10 of our quality criteria, against 6/10 for JPMorgan Chase. The criteria are identical for both: profitability, revenue and free cash flow per share growth, share count control, revenue per employee growth, margin expansion, return on capital, debt, conversion of earnings into cash, and cash conversion cycle. No weighting, no opinion: it is a count. The P/FCF multiple cannot be computed for one of the two stocks, for lack of usable free cash flow. The price comparison is therefore incomplete, and only quality is comparable here.
JPMorgan Chase or Bank of America: which one is cheaper?
The P/FCF multiple cannot be computed for one of the two stocks, for lack of usable free cash flow. The price comparison is therefore incomplete, and only quality is comparable here.
Can you hold both?
Nothing prevents it, and it is common when both pass our quality criteria. Keep in mind that two companies in the same sector often react to the same shocks, so holding both diversifies less than it looks. This page is a numbers comparison, not a recommendation.