JPMorgan Chase (NYSE: JPM) is a $349 billion company today. Investors that bought shares one year ago are sitting on a 45.77% total return. That’s above the S&P 500’s return of 19.66%.

JPMorgan Chase stock is beating the market, and it reports earnings soon. But does that make it a good buy today? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company using data from Bloomberg LP.

Our system looks at six key metrics…

✓ Earnings-per-Share (EPS) Growth: JPMorgan Chase reported a recent EPS growth rate of 17.31%. That’s above the banking industry average of 14.38%. That’s a great sign. JPMorgan Chase’s earnings growth is outpacing that of its competitors.

✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the banking industry is 22.04. And JPMorgan Chase’s ratio comes in at 13.83. It’s trading at a better value than many of its competitors.

✓ Debt-to-Equity: The debt-to-equity ratio for JPMorgan Chase stock is 245.38%. That’s below the banking industry average of 321.87%. The company is less leveraged.

✗ Free Cash Flow per Share Growth: JPMorgan Chase’s FCF has been lower than that of its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.

✗ Profit Margins: The profit margin of JPMorgan Chase comes in at 27.6% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. JPMorgan Chase’s profit margin is below the banking average of 28.25%. So that’s a negative indicator for investors.

✗ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for JPMorgan Chase is 10.66%, and that’s below its industry average ROE of 11.58%.

JPMorgan Chase stock passes three of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Hold.*

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Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing.

 

*The views and opinions expressed in this piece are those of the author and do not necessarily reflect the official position of professional analysts.