Critical Survey: MB Financial (MBFI) and JPMorgan Chase & Co. (JPM)

MB Financial (NASDAQ:MBFI) and JPMorgan Chase & Co. (NYSE:JPM) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, risk, dividends, institutional ownership and profitability.

Earnings and Valuation

This table compares MB Financial and JPMorgan Chase & Co.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MB Financial $1.04 billion 3.59 $304.04 million $2.39 18.52
JPMorgan Chase & Co. $113.90 billion 3.22 $24.44 billion $6.87 15.57

JPMorgan Chase & Co. has higher revenue and earnings than MB Financial. JPMorgan Chase & Co. is trading at a lower price-to-earnings ratio than MB Financial, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

MB Financial has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, JPMorgan Chase & Co. has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for MB Financial and JPMorgan Chase & Co., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MB Financial 0 6 0 0 2.00
JPMorgan Chase & Co. 0 8 14 0 2.64

MB Financial presently has a consensus price target of $47.53, suggesting a potential upside of 7.37%. JPMorgan Chase & Co. has a consensus price target of $121.66, suggesting a potential upside of 13.75%. Given JPMorgan Chase & Co.’s stronger consensus rating and higher possible upside, analysts plainly believe JPMorgan Chase & Co. is more favorable than MB Financial.

Profitability

This table compares MB Financial and JPMorgan Chase & Co.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MB Financial 27.78% 7.92% 1.06%
JPMorgan Chase & Co. 22.80% 13.18% 1.18%

Dividends

MB Financial pays an annual dividend of $0.96 per share and has a dividend yield of 2.2%. JPMorgan Chase & Co. pays an annual dividend of $3.20 per share and has a dividend yield of 3.0%. MB Financial pays out 40.2% of its earnings in the form of a dividend. JPMorgan Chase & Co. pays out 46.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. MB Financial has increased its dividend for 6 consecutive years and JPMorgan Chase & Co. has increased its dividend for 7 consecutive years. JPMorgan Chase & Co. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

74.2% of MB Financial shares are owned by institutional investors. Comparatively, 70.6% of JPMorgan Chase & Co. shares are owned by institutional investors. 2.7% of MB Financial shares are owned by insiders. Comparatively, 0.7% of JPMorgan Chase & Co. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

JPMorgan Chase & Co. beats MB Financial on 11 of the 17 factors compared between the two stocks.

About MB Financial

MB Financial, Inc. operates as a bank holding company for MB Financial Bank, N.A. that provides various financial services to small and middle market businesses, and individuals in the United States. The company operates through three segments: Banking, Leasing, and Mortgage Banking. The Banking segment offers commercial banking products, including working capital loans and lines of credit; accounts receivable financing; inventory and equipment financing; industrial revenue bond financing; ESOP financing; business acquisition loans; owner occupied real estate loans; asset-based loans; and financial, performance, and commercial letters of credit. Its commercial banking products also comprise deposit and treasury management products and services, such as Internet banking products, investment sweep and zero balance accounts, automated tax payments, ATM access, telephone banking, lockboxes, automated clearing house transactions, account reconciliation, controlled disbursement, information reporting, wire transfers, vault services, remote deposit capture, and checking accounts; capital markets and international banking services; and credit, deposit, and treasury management services for real estate operators and investors. In addition, this segment offers loans to equipment lessors; retail banking services; cards and bank sponsorships; and wealth management solutions. The Leasing segment provides lease originations and related services. This segment's lease portfolio consists of computer systems, satellite equipment, and medical equipment, as well as general manufacturing, industrial, construction, and transportation equipment. The Mortgage Banking segment originates and services residential mortgage loans for sale to investors. The company offers its products and services through 86 banking offices in the Chicago metropolitan area; and 129 ATMs. MB Financial, Inc. was founded in 1911 and is headquartered in Chicago, Illinois.

About JPMorgan Chase & Co.

JPMorgan Chase & Co. operates as a financial services company worldwide. It operates through four segments: Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management. The Consumer & Community Banking segment offers deposit and investment products and services to consumers; lending, deposit, and cash management and payment solutions to small businesses; residential mortgages and home equity loans; and credit cards, payment processing services, auto loans and leases. The Corporate & Investment Bank segment provides investment banking products and services, including advising on corporate strategy and structure, and capital-raising in equity and debt markets, as well as loan origination and syndication; treasury services, such as cash management and liquidity solutions; and cash securities and derivative instruments, risk management solutions, prime brokerage, and research. This segment also offers securities services, including custody, fund accounting and administration, and securities lending products for asset managers, insurance companies, and public and private investment funds. The Commercial Banking segment offers financial solutions, including lending, treasury, investment banking, and asset management to corporations, municipalities, financial institutions, and nonprofit entities, as well as financing to real estate investors and owners. The Asset & Wealth Management segment provides investment and wealth management services across various asset classes, such as equities, fixed income, alternatives, and money market funds; multi-asset investment management services; retirement services; and brokerage and banking services comprising trusts, estates, loans, mortgages, and deposits. JPMorgan Chase & Co. was founded in 1799 and is headquartered in New York, New York.

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