JP Morgan Chase & Co (JPM)

Thinks there is a catalyst over the next couple of years to see increased dividend payouts. This one is paying out about 23% of its earnings and he thinks there is going to be a steady progression of growing the percentage. Increasing market share in the sector that people care about. Yield of 2.39%.

US plays are cheaper. Have done very well in the last year. Some of the risk has been taken out. 8.5 times earnings, just under book.

About one year away from completely rebuilding their balance sheet. Taking mortgage market share. Holding up net interest margins. Likely going to get go ahead to buy back more shares this spring and raise dividends.

If you are going into a US financial, especially large in the diversified markets, this would be the one. Good management. Stock had a great run but if the US recovery plays out, you will get improved capital markets activity and this name will get more upside. Dividend increase is quite likely if their earnings continue to grow.

Probably the more senior of the banks and is priced as such. Worked its way back to trading at around Book. Came through the 2008 situation a little more intact because he thinks it was better managed with less exposure to some of the problem areas. Banks normally make their money on net interest spreads and with a flat yield curve, although it is starting to steepen a touch, they just can’t make a lot of money borrowing short and lending long.

$58.45 Model price, 24% upside. This is the first positive sign of this market. 2.3 Trillion of assets so if it can’t move, then the US economy can’t move.

He is taking advantage of the higher Canadian $. US housing market is just recovering whereas the Canadian market has peaked. Big dividend increase expected in 2013 and a big share buyback.

Great bank. With a 2-3 year view, you will be very happy owning it.

JPM-N is a better run bank but at a higher multiple. Didn’t have all of the issues that BAC-N had. JPM-N has a great retail franchise, a great investment banking franchise and a great asset management business. BAC-N has batter upside over the long term.

She is not in US financials at all right now. Trade at a discount to Canadian banks. If you want US financial exposure then this is one you would go to. She is not interested right now in big US financials. Prefers smaller, regional banks and is looking at them now.

Sell Royal Bank (RY-T) and buying this bank? Royal sits up well here. Just bought Ally Financial so they are going to be the biggest market in auto leasing and this will be a nice powerful driver for growth. Thinks wholesale is going to be where growth comes from. J.P. Morgan is not a bad idea. He also likes Citigroup (C-N) at these prices and is probably the one with the most upside and the most to benefit from a normalizing world.

One of the best in the business. You will slowly get the premium multiple back. Well positioned corporately. Biggest plus for US banks is the turn in the housing market in the US.

Trades at a discount to Book and at 8X earnings. After the whole scandal with the London Whale and J.P. Morgan, the equity price overreacted and presented a buying opportunity. Good management. Have exposure to the US mortgage market.

Bank of America (BAC-N) or J.P. Morgan (JPM-N)? Looked at both in the summer and decided on J.P. Morgan after the “London whale” incident when the stock fell. Also, J.P. Morgan has a dividend and at better balance sheet. Also, they are allowed to raise their dividends. Still buying it today.

(Market Call Minute.) If you own, you should probably hold for a possible US recovery.