Personal Finance

Which Big Bank Would You Buy Today?

With all four of the nation's biggest banks having reported fourth-quarter earnings, investors can now get a sense for which bank's stock is the best buy now. On one end of the spectrum is Citigroup (NYSE: C) , which struggled last quarter but trades for the lowest multiple to book value of its peer group. On the other end is JPMorgan Chase (NYSE: JPM) , which just eclipsed Wells Fargo to be the most profitable multitrillion bank in the country, but trades for a much higher multiple.

To learn more about which of these is the better buy today, listen in to the segment below of this week's episode of Industry Focus: Financials , in which The Motley Fool's Michael Douglass and contributor John Maxfield discuss whether bank investors should be looking for quality or value right now.

A full transcript follows the video.

10 stocks we like better than Citigroup

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Citigroup wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of January 4, 2017

This podcast was recorded on Jan. 23, 2017.

Michael Douglass: We're an investing podcast, so if you had to pick one of the big four we talked about today -- that's Bank of America , Citigroup, Wells Fargo, and JPMorgan -- if you had to pick one right now as your favorite big bank stock, which would it be?

John Maxfield: I would have to say -- it's tempting to say that Citigroup is because the value of the stock is so low. But the problem with Citigroup is -- and we detailed this earlier in the show -- is that it's going to struggle going forward, particularly, to get back to the policy question, if the presidential administration goes in a protectionist direction, because Citigroup is such an internationally focused bank, that could really impact it. So, even though Citigroup is the cheapest, I don't think that's the direction that I would go in as an investor. The direction I would go in as an investor at this point is JPMorgan Chase. Again, to the point we made earlier, because the value of that franchise ... as these interest rates come up, and assuming that they do, the value of that franchise is really going to come through. And it is now, as of the fourth quarter, the most profitable multi-trillion dollar bank in the quarter. And going forward, I just don't see that trend abating at all.

Douglass: Good thing to end on...always like to end on a high note.

John Maxfield owns shares of Bank of America and Wells Fargo. Michael Douglass has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Personal Finance Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More