The financial sector is a fundamental component of the stock market, with bank stocks playing a significant role. These stocks represent shares in financial institutions like banks that provide various services, including loans, deposits, asset management, and investment services. As core parts of the economic system, banks are sensitive to changes in interest rates, economic policies, and overall economic health.
Investing in bank stocks can offer advantages such as stability and consistent dividend payouts. Banks often operate with regulated oversight, contributing to their stability. They are also known to provide steady dividends, which are appealing to income-focused investors. Moreover, during periods of rising interest rates, bank profits can increase as they earn more from the spread between what they pay on deposits and what they earn on loans.
However, there are disadvantages. Bank stocks are highly sensitive to economic cycles. During economic downturns, these stocks can suffer from increased loan defaults and tighter profit margins. Regulatory changes can also impact profitability, adding a layer of uncertainty. Additionally, the performance of bank stocks is closely tied to domestic and global economic conditions, making them vulnerable to economic downturns and financial crises. With this in mind, let’s look at two large-cap bank stocks for your list in the stock market this week.
Bank Stocks To Invest [Or Avoid] In Right Now
The Goldman Sachs Group (GS Stock)
To start, The Goldman Sachs Group Inc. (GS) is a global investment banking, securities, and investment management firm. The company provides a wide range of financial services to a substantial and diversified client base, including corporations, financial institutions, governments, and individuals.
Just last month, Goldman Sachs reported better-than-projected first quarter FY 2024 financial results. Diving right in, the big bank notched in earnings of $11.58 per share, with revenue of $32.16 billion for the quarter. This is versus Wall Street’s estimates for the quarter which were an EPS of $8.54 along with revenue estimates of $12.92 billion. In addition, revenue increased by 26.71% on a year-over-year basis.
In 2024 year-to-date, shares of Goldman Sachs stock are up 18.77% thus far. Meanwhile, ahead of Tuesday morning’s trading session, GS stock looks like its set to open at around $461.18 a share.
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JPMorgan Chase & Co. (JPM Stock)
Next up, JPMorgan Chase & Co. (JPM) is one of the oldest and largest financial institutions in the world. The company serves millions of consumers, small businesses, and many of the world’s most prominent corporate, institutional, and government clients.
Earlier this month, JPMorgan Chase & Co. announced that its Board of Directors has declared a quarterly dividend of $1.15 per share on the firm’s outstanding common stock. This dividend is scheduled to be paid on July 31, 2024, to shareholders who are on record as of the close of business on July 5, 2024. This results in an annual dividend yield of 2.29% for JPM shareholders.
Year-to-date, JPMorgan Chase & Co. stock is trading higher by 16.64% so far. Moreover, during Tuesday’s pre-market trading session, shares of JPM stock are trading slightly lower ahead of the opening bell at $200.37 a share.
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