It's a good time for banks. The U.S. House of Representatives is passing a bill that will roll back some Dodd-Frank regulations and, thanks to the new tax bill, banks are reaping the benefits of lower corporate rates and a boost in overall profits.
JPMorgan Chase, one of the world's largest financial service companies, is among those doing well: this month, Morgan Stanley added it to its list of the 30 best long-term stock picks. That makes sense, given that the value of JPMorgan's stock has risen more or less steadily over the past decade and has recently reached new highs.
In fact, if you put $1,000 in the company in 2008, according to CNBC calculations, your investment would be worth more than $2,600 Wednesday, or over two and a half times as much, including price appreciation and dividend gains reinvested.
In the charts below, all data splits are adjusted and gain-loss figures do not include dividends, interest, distributions or fees except on cash accounts. The portfolio value represents current holdings and the comparison charts represent current and historical prices of individual benchmarks, stocks or exchange-traded funds.
While JPMorgan's stock has performed well, any individual stock can over- or under-perform and past returns do not predict future results. Still, many analysts, including those at Morgan Stanley, are optimistic.
"We have tried to identify the best franchises, not the most undervalued stocks," Morgan Stanley's research group wrote of its best long-term stocks list. "The main criterion is sustainability — of competitive advantage, business model, pricing power, cost efficiency and growth. We selected companies that scored exceptionally well on these criteria."
JPMorgan is "our top pick among the U.S. money center banks," the researchers wrote. The bank's "push into new markets, opportunity to gain share, efficiency improvements and benefit from deregulation drive our positive long-term view. JPMorgan is opening 400 branches to enter 15-20 new markets over the next five years, forging ahead on its long-term growth strategy. We expect JPMorgan can reach top five in each of these new markets."
If you're considering investing in JPMorgan or in the stock market in general, experts advise starting slow. Experienced investors Warren Buffett, Mark Cuban and Tony Robbins suggest beginning with index funds, which hold every stock in an index, offer low turnover rates, attendant fees and tax bills, and fluctuate with the market to eliminate the risk of picking individual stocks.
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