Analyzing JPMorgan Chase & Co. (NYSE:JPM) & Itau Unibanco (NYSE:ITUB)

Itau Unibanco (NYSE:ITUB) and JPMorgan Chase & Co. (NYSE:JPM) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Volatility & Risk

Itau Unibanco has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, JPMorgan Chase & Co. has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Valuation & Earnings

This table compares Itau Unibanco and JPMorgan Chase & Co.”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itau Unibanco	$30.04 billion	2.98	$8.03 billion	$0.76	10.65
JPMorgan Chase & Co.	$280.35 billion	3.25	$57.05 billion	$23.34	14.70

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

Analyst Ratings

This is a summary of current recommendations and price targets for Itau Unibanco and JPMorgan Chase & Co., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itau Unibanco	0	1	2	0	2.67
JPMorgan Chase & Co.	0	12	16	0	2.57

Itau Unibanco currently has a consensus target price of $10.00, indicating a potential upside of 23.53%. JPMorgan Chase & Co. has a consensus target price of $360.58, indicating a potential upside of 5.13%. Given Itau Unibanco’s stronger consensus rating and higher probable upside, research analysts clearly believe Itau Unibanco is more favorable than JPMorgan Chase & Co..

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Itau Unibanco	26.41%	21.40%	1.53%
JPMorgan Chase & Co.	21.86%	18.23%	1.33%

Dividends

Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.4%. JPMorgan Chase & Co. pays an annual dividend of $6.00 per share and has a dividend yield of 1.7%. Itau Unibanco pays out 3.9% of its earnings in the form of a dividend. JPMorgan Chase & Co. pays out 25.7% 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. JPMorgan Chase & Co. has increased its dividend for 15 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

71.6% of JPMorgan Chase & Co. shares are owned by institutional investors. 0.6% of Itau Unibanco shares are owned by insiders. Comparatively, 0.4% of JPMorgan Chase & Co. shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

JPMorgan Chase & Co. beats Itau Unibanco on 10 of the 17 factors compared between the two stocks.

About Itau Unibanco

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.

About JPMorgan Chase & Co.

JPMorgan Chase & Co. is a financial holding company, which engages in the provision of financial and investment banking services. It focuses on investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. It operates through the following segments: Consumer and Community Banking (CCB), Commercial and Investment Bank (CIB), Asset and Wealth Management (AWM), and Corporate. The CCB segment originates and services mortgage loans. The CIB segment makes markets and services clients across fixed income, foreign exchange, equities, and commodities. The AWM segment provides initial capital investments in products such as mutual funds and capital invested alongside third-party investors. The Corporate segment manages its liquidity, funding, capital, structural interest rate, and foreign exchange risks. The company was founded in 1799 and is headquartered in New York, NY.