JP Morgan Chase & Co (JPM)

Well-run with a fine CEO. The US banking sector has seen serious changes in regulations which favours them. JPM is returning a lot of capital to shareholders. Attractive long term.

(Past Top Pick Aug. 9, 2018, Down 6%) Earnings are up 24%, but the stock is down due to general market jitters. Increasing interest rates will widen the banks' spreads. They still have the best bank CEO in the U.S.

Rising interest rates, good management and it's currently off its highs, so a good time to enter this. Also, the U.S. is at full employment. There's room to move. He thinks the US Fed will do three more 0.25% hikes, which won't kill the economy or housing market. (3.0% dividend yield, Analysts' price target: $124.09)

You see a nice little trend here. It got broken but it has a double top. US banks really want to get going. Rising rates only benefit banks to a point. US banks are performing much better than Canadian ones. Stick with this one.

This is the best of the financial sector stocks, he feels. It has a great dividend and strong balance sheet. If the macro economies do well it will too. They can do buybacks and trades at 1.75 to book value. He thinks national credit provisions for losses will be a key sell signal – when they tighten, get out. Yield 2%.

CEO Jamie Dimon successfully steered JPM out of the recession a decade ago. If there's a US slowdown ahead, then bad debt will kick up and effect JPM. Sure, tailwinds have doubled US bank stock prices in the past few years, but looking ahead Why buy a US bank when you have to pay a withholding tax (compared to a Canadian bank stock)?

It is a nicely diversified bank with half from retail then the rest from investment banking and wealth management. You have to look at them in the light of any other banks you own. Rates have only gone up in the short term and not the long end, which you need. He thinks it is probable that the dividend will grow.

It isn't stuck in the mud, but it's in a larger upward trend. The U.S. banks come into seasonality later in winter. As long as the JPM trendline doesn't break, then hold it. It may go sideways a bit, but he's looking to buying it

He likes US banks and prefers them to Canadian banks. US household debt is lower than Canada’s. Interest rates are likely to rise faster in the US than in Canada, which is good for US bank stocks. When 10-year bond rates finally rose higher than 3%, US banks started rising again. He owns two regional US banks and is currently looking at a large US bank. Overall, he likes the sector, including JP Morgan, but he is not planning to buy that particular bank.

He added more last week (and other U.S. banks). There's a lot of upside built into the whole space. He's very positive in this space, and expects more upside. A great buy.

They have $1.5 trillion in deposits. They're grown their dividend $12% a year over the last 5 years. Capital position equal to 12%, which is more than they need. Expect more dividend growth. They are the gorilla and will only get bigger. (2.7% dividend, Analysts' price target: $122.36)

It is defensive. Regulatory issues are being scaled back. Rising interest rates are positive for them. They are spending a large amount of money in technology. A lot of money will come back to shareholders as share buybacks and dividends. (Analysts’ target: $121.66).

Love it. A global bank. US economy will stay strong, interest rates will rise, and banks do well in this environment. Extremely well managed. Came through 2008 will less damage than the others. Yield is 1.9%. (Analysts’ price target is $121.34.)

Very well-run. They owned and sold it. Great business. Can’t go wrong with this.

(Past Top Pick on August 30, 2017, Up 19%) They're spending $11 billion on technology this year which distinguishes them from their peers. Pays a 3% dividend yield. Still a winner.