JPMorgan Class A & Co (JPM) Extended Graph Analysis
July 15th, 2020 Posted by criseldar Extended Analysis No Comment yetCompany Profile
JPMorgan Chase & Co. is the oldest and largest financial institution and a multinational investment bank. Headquartered in New York, New York, United States. The company was founded on December 1, 2000 by AAron Burr and incorporated in Delaware. The company is a provider of multiple investment banking and financial services.
JPMorgan chase & Co. is traded as NYSE:JPM, its predecessor was Bank of the Manhattan Company which was founded in September 1, 1799
JPMorgan Chase & Co (JPM) Extended Graph Analysis
1. JPM Cash Flow
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Net cash flow provided by operating activitIes | 73,466,000,000 | 20,196,000,000 | -2,501,000,000 | 14,187,000,000 | 6,046,000,000 | -33,846,000,000 |
Net cash used for investing activities | 106,980,000,000 | -114,949,000,000 | -10,283,000,000 | -197,993,000,000 | -54,013,000,000 | -225,464,000,000 |
Net cash provided by (used for) financing activities | -187,511,000,000 | 98,271,000,000 | 14,642,000,000 | 34,158,000,000 | 32,987,000,000 | 325,857,000,000 |
Capital expenditure | -77,008,000,000 | -124,102,000,000 | -107,658,000,000 | -104,459,000,000 | -255,576,000,000 | -354,142,000,000 |
Free cash flow | 73,466,000,000 | 20,196,000,000 | -2,501,000,000 | 14,187,000,000 | 6,046,000,000 | -33,846,000,000 |
Facts:
- Net cash from operating activities was -$33.846 billion in 2020 trailing twelve months.
- Net cash from investing activities was -$225.464 billion in 2020 trailing twelve months.
- Cash provided by (used for) financing activities was $325857 billion in 2020 trailing twelve months.
- Capital expenditures were -$354.142 billion in 2020 trailing twelve months.
- Free cash flow was -$33.846 billion in 2020 trailing twelve months.
Explanation
- Cash from operating activities was negative due to the impact of a significant amount of accounts receivable.
- Net cash used for investing activities was purchases of property, plant and equipment and other investing activities..
- Net cash provided by (used for) financing activities was preferred stock issued, common stock repurchased, dividends payments and a significant amount of other financing activities.
- Capital expenditures were purchases of property, plant and equipment.
- Free cash flow was erratic in movement in the last five years and has a negative amount in the trailing twelve months due to negative cash from operations.
Interpretations
The company was not efficient in generating cash from operations in 2020 trailing twelve months due to a decrease in net income by 18 percent from 2019. Free cash flow was negative as well due to negative cash from operations.
2. JPM BALANCE SHEET
2015 | 2016 | 2017 | 2018 | 2019 | |
Total cash | 20,490,000,000 | 23,870,000,000 | 25,900,000,000 | 22,320,000,000 | 21,700,000,000 |
Net property, plant and equipment | 14,360,000,000 | 14,130,000,000 | 14,160,000,000 | 14,930,000,000 | 25,818,000,000 |
Total assets | 2,370,000,000,000 | 2,490,000,000,000 | 2,530,000,000,000 | 2,620,000,000,000 | 2,690,000,000,000 |
Total liabilities | 2,120,000,000,000 | 0 | 2,280,000,000,000 | 2,370,000,000,000 | 2,430,000,000,000 |
Retained earnings | 146,420,000,000 | 162,440,000,000 | 177,680,000,000 | 199,200,000,000 | 223,210,000,000 |
Stockholders equity | 247,570,000,000 | 254,190,000,000 | 255,690,000,000 | 256,520,000,000 | 261,320,000,000 |
Facts:
- Total cash was $21.7 billion in 2019.
- Net property, plant and equipment was $26 billion in 2019.
- Total assets were $2.690 trillion in 2019.
- Total liabilities were $2.430 trillion in 2019.
- Retained earnings was $223 billion in 2019
- Stockholders equity was $261 billion in 2019.
Explanation
- Total cash represents 0.81 percent of the total assets.
- Net property, plant and equipment represent 1 percent of the total assets.
- Total assets have a growth of 14 percent in five years.
- Total liabilities represents 90 percent of the total liabilities and stockholders equity.
- Retained earnings represents 85 percent of total equity.
- Stockholders equity represents 10 percent of the total liabilities and equity.
Interpretation
The company is highly leveraged, it uses more of creditors money than the investors investment in equity. In other terms, the creditors have more stake in the company.
3. JPM INCOME AND MARKET
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Revenue | 93,543,000,000 | 95,668,000,000 | 99,624,000,000 | 109,029,000,000 | 115,627,000,000 | 114,755,000,000 |
Net Income | 24,442,000,000 | 24,733,000,000 | 22,778,000,000 | 30,923,000,000 | 34,844,000,000 | 28,483,000,000 |
Market Capitalization | 241,899,000,000 | 308,768,000,000 | 371,052,000,000 | 319,780,000,000 | 429,913,000,000 | 296,506,000,000 |
Intrinsic Value | 303,298,000,000 | 403,087,000,000 | 839,971,000,000 | 707,132,000,000 | 973,461,000,000 | 778,154,000,000 |
Facts
- Revenue was $115 billion in 2020 trailing twelve months.
- Net income was $28 billion in 2020 trailing twelve months
- Market capitalization was $295.506 billion in 2020 trailing twelve months.
- Intrinsic value was $778 billion in 2020 trailing twelve months.
Explanation
- Revenue grew 23 percent in five years.
- Net income grew 17 percent in five years.
- Market capitalization was lesser by 31 percent against intrinsic value from 2019 to the trailing twelve months.
- Intrinsic value was higher than market capitalization meaning the stock price of JPM was undervalued.
Interpretation
Net income represents 25 percent of the revenue. The company’s income statement does show any negative bottom line in the last five years.
4. JPM FINANCIAL RATIOS
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | |
Asset turnover (average) | 0.03 | 0.04 | 0.04 | 0.04 | 0.04 | 0.04 |
Return on assets % | 0.91 | 0.93 | 0.90 | 1.19 | 1.30 | 0.96 |
Return on equity % | 10.34 | 10.05 | 9.86 | 13.35 | 14.91 | 12.21 |
Debt/Equity | 1.30 | 1.29 | 1.24 | 1.22 | 1.24 | 1.29 |
Facts
- Asset turnover was averaging 0.04 in 2020 trailing twelve months.
- Return on assets was 0.96 percent in 2020 trailing twelve months.
- Return on equity was 12.21 percent in 2020 trailing twelve months.
- Debt/Equity ratio was 1.29 in 2020 trailing twelve months.
Explanation
- Asset turnover indicates that for every dollar in assets, the company generated .04 cents of sales which is not very efficient in using its assets.
- Return on assets indicted that for every $1 invested in assets it generated 0.96 cents of net income.
- Return on equity indicates that for every dollar invested in equity it generated 12 cents in profit.
- Debt/Equity ratio indicates that for every dollar invested in equity the company has $1.29 in debt. Debt level is 129 percent of equity.
Interpretation
Financial ratios show that the management was not very efficient in generating a return on the investment made.The company is highly leveraged.
5. JPM KEY EXECUTIVE COMPENSATION
2015 | 2016 | 2017 | 2018 | 2019 | |
Key Executive Compensation | |||||
Salary | 9,884,250 | 11,303,234 | 11,998,628 | 12,026,026 | 12,655,889 |
Bonus | 16,000,000 | 17,000,000 | 25,300,000 | 27,100,000 | 31,373,333 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 35,684,204 | 48,615,750 | 61,146,766 | 66,211,372 | 74,673,974 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 961,291 | 357,786 | 427,581 | 648,889 | 708,657 |
Total | 62,529,873 | 77,340,235 | 98,947,621 | 106,004,281 | 119,556,090 |
James S Dimon, Chairman of the Board and CEO | |||||
Salary | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 |
Bonus | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 11,100,000 | 20,500,000 | 21,500,000 | 23,000,000 | 24,500,000 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 621,060 | 205,551 | 286,228 | 519,840 | 578,246 |
Total | 18,230,313 | 27,236,892 | 28,321,737 | 30,033,745 | 31,612,616 |
Gordon A. Smith, Co-President and Co-COO, CEO of Consumer and Community Banking | |||||
Salary | 750,000 | 750,000 | 750,000 | ||
Bonus | 7,700,000 | 8,500,000 | 8,700,000 | ||
Annual Other Income | 0 | 0 | 0 | ||
Restricted Stock Award | 10,950,000 | 11,550,000 | 12,750,000 | ||
Securities Options | 0 | 0 | 0 | ||
LTIP Payout | 0 | 0 | 0 | ||
Non-Equity Compensation | 0 | 0 | 0 | ||
Other Compensation | 0 | 0 | 0 | ||
Total | 19,405,985 | 20,804,089 | 22,209,071 | ||
Daniel Pinto, Co-President, Co-Chief Operating Officer, CEO of the Corporate and Investment Bank | |||||
Salary | 6,884,250 | 8,303,234 | 8,238,628 | 8,276,026 | 8,239,222 |
Bonus | 0 | 0 | 0 | 0 | 0 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 9,584,204 | 11,615,750 | 10,696,766 | 12,761,372 | 13,723,974 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 217,881 | 103,640 | 80,384 | 68,548 | 72,246 |
Total | 16,687,210 | 20,022,624 | 19,015,778 | 21,105,946 | 22,035,442 |
Mary Callahan Erdoes, CEO, Asset and Wealth Management | |||||
Salary | 750,000 | 750,000 | 750,000 | 750,000 | 750,000 |
Bonus | 6,900,000 | 7,300,000 | 7,500,000 | 7,900,000 | 8,100,000 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 9,450,000 | 10,330,000 | 10,950,000 | 11,250,000 | 11,850,000 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 0 | 0 | 0 | 0 | 0 |
Total | 17,100,000 | 18,432,124 | 19,242,152 | 19,900,000 | 20,754,269 |
Marianne Lake, CEO, Consumer Lending | |||||
Salary | 750,000 | 750,000 | 750,000 | 750,000 | 750,000 |
Bonus | 4,100,000 | 4,700,000 | 5,100,000 | 5,700,000 | 4,840,000 |
Annual Other Income | 0 | 0 | 0 | 0 | 0 |
Restricted Stock Award | 5,550,000 | 6,150,000 | 7,050,000 | 7,650,000 | 8,550,000 |
Securities Options | 0 | 0 | 0 | 0 | 0 |
LTIP Payout | 0 | 0 | 0 | 0 | 0 |
Non-Equity Compensation | 0 | 0 | 0 | 0 | 0 |
Other Compensation | 112,350 | 48,595 | 60,969 | 60,501 | 58,165 |
Total | 10,512,350 | 11,648,595 | 12,960,969 | 14,160,501 | 15,198,165 |
Jennifer A. Piepzak, CFO | |||||
Salary | 666,667 | ||||
Bonus | 3,733,333 | ||||
Annual Other Income | 0 | ||||
Restricted Stock Award | 3,300,000 | ||||
Securities Options | 0 | ||||
LTIP Payout | 0 | ||||
Non-Equity Compensation | 0 | ||||
Other Compensation | 0 | ||||
Total | 7,746,527 |
Facts:
- Total key executive compensation was $62,529,873 in 2015.
- Total key executive compensation in 2016 was $77,340,235.
- Key executive compensation 2017 was $98,947,621.
- Key executive compensation in 2018 was $106,004,281.
- Executive compensation in 2019 was $119,556,090.
Explanation
- Total key executive compensation represents 0.32 percent of the net income in 2019.
- Total compensation of James S Dimon, Chairman of the Board and CEO represents 26 percent of the total key executive compensation.
- Compensation of Gordon A. Smith, Co-President and Co-COO, CEO of Consumer and Community Banking represents 19 percent of the total compensation.
- ‘Compensation of Daniel Pinto, Co-President, Co-Chief Operating Officer, CEO of the Corporate and Investment Bank represents 18 percent of the total key executive compensation.
- The compensation of Mary Callahan Erdoes, CEO, Asset and Wealth Management represents 17 percent of the total compensation.
- The compensation of Marianne Lake, CEO, Consumer Lending represents 13 percent of the key executive compensation.
- Compensation of Jennifer A. Piepzak, CFO represents 6 percent of the total compensation.
Interpretation
The total key executive compensation was less than one percent of the total net income in 2019.
6. JPM LOBBYING AND CONTRIBUTIONS
PERIOD | AMOUNT |
1999 | $600,000 |
2000 | $2,910,000 |
2001 | $6,300,000 |
2002 | $4,700,000 |
2003 | $6,710,000 |
2004 | $4,080,000 |
2005 | $3,640,000 |
2006 | $6,120,000 |
2007 | $6,460,000 |
2008 | $5,930,000 |
2009 | $6,170,000 |
2010 | $7,410,000 |
2011 | $7,620,000 |
2012 | $8,060,000 |
2013 | $5,460,000 |
2014 | $6,280,000 |
2015 | $3,590,000 |
2016 | $2,920,000 |
2017 | $2,990,000 |
2018 | $2,970,000 |
2019 | $2,810,000 |
2020 | $1,944,507 |
Facts:
- JPMorgan is incurring lobbying and contributions expenditures since 2011 to politicians.
Explanation:
A note from OpenSecret.org Center for Responsive Politics, quoted below:
“Contributions to 527s are not included in the Individuals, PACs, Soft (Indivs), or Soft (Orgs) columns, so the sum of these columns may not equal the Total column.
The numbers on this page are based on contributions of $200 or more from PACs and individuals to federal candidates and from PAC, individual and soft money donors to political parties, as reported to the Federal Election Commission. While election cycles are shown in charts as 1996, 1998, 2000 etc. they actually represent two-year periods. For example, the 2002 election cycle runs from January 1, 2001 to December 2002.
Soft money contributions were not publicly disclosed until the 1991-92 election cycle. Soft money donations to parties were banned after the 2002 cycle.
Data for the current election cycle was released by the Federal Election Commission on June 22, 2020.”
Interpretation
Lobbying and contributions to politicians vary every cycle; it may increase or decrease in amount depending on the attention given by the federal government on the issues of the company.
Overview
The net margin was good at 25 percent in the trailing twelve months, it has diversity income streams. The company uses more resources from creditors than from the investor’s investment in equity. In other terms, the creditors have more stake than the investors. The stock price of JPM was undervalued up to the point of writing and posting to websites.
CITATION
https://www.jpmorganchase.com/
https://www.morningstar.com/stocks/xnys/jpm/quote
https://www.opensecrets.org/orgs/summary?id=D000000103
Researched and written by Criselda