JPMorgan Chase Tops Q4 Estimates, Profit Up 47%

JPMorgan Chase & Co. (JPM) posted fourth quarter earnings of $1.12 this morning, easily beating the $1.00 profit expected by analysts.

The second-largest financial institution in America brought in net income of $4.8 billion, topping last year’s Q4 figure by 47%, while revenue rose 6% year over year. The firm’s Q4 revenue tally of $26.7 billion beat estimates by a healthy margin, as Wall Street had projected $24.4 billion in sales.

Market Reaction

After initially jumping above $45, shares of JPM are down slightly to $44.20 (-0.45%) in pre-market trading, where they carry a paltry 0.45% dividend yield.

Dividend Thoughts

JPMorgan cut its quarterly dividend from $0.38 per share down to today’s irrelevant $0.05 per share at the end of 2008, and all-world CEO Jamie Dimon has hinted that the company’s first post-cut dividend hike is on the horizon. Many have speculated that the impending increase could raise the bank’s quarterly payout to $0.25 per share, although there was no mention of a dividend increase in today’s earnings release.

A boost to a quarterly dividend of $0.25 per share would instantly pop JPMorgan’s yield to 2.26% at the current share price, with a very manageable 21.7% forward payout ratio. Dimon mentioned recently that he’d like to see a payout ratio of 35%, which leaves the door open for a potentially huge yield-on-cost at today’s share price, assuming current earnings estimates are in the right ballpark.

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