Buy This, Not That: Why This Banking Powerhouse Belongs in Your Portfolio

Shah Gilani|April 16, 2025

Ladies and gentlemen,

Today, we have a financial fisticuff on our hands.

Two of the largest banks in the world posted outstanding earnings results despite a tumultuous environment.

Jamie Dimon led JPMorgan Chase (NYSE: JPM) into record revenues, pulling in a whopping $3.8 billion.

Dealmaking powerhouse Goldman Sachs (NYSE: GS) managed to do the same, with an equity trading revenue haul of $4.19 billion.

I’ve dissected these financial heavyweights down to their quarterly bones.

And it turns out one is a clear favorite for reasons you might not expect.

Click on the thumbnail below and tune in to this week’s Buy This, Not That.

TRANSCRIPT

Hey, everybody.

Shah Gilani here with your weekly BTNT, as in Buy This, Not That.

Today, I’m going to hit on a couple of the big banks because earnings are out for JPMorgan Chase and Goldman Sachs.

It’s not necessarily an apples-to-apples comparison, but it’s close enough.

The only major difference is that JPMorgan Chase is more of a commercial bank. It takes deposits and handles more retail-type business.

Goldman tried to get into that and failed miserably. So, it exited that entire business.

But as far as big banks that move a lot and have tremendous earnings power, I think these two are the premier banks to own.

If you own JP Morgan Chase, why would you want to own Citigroup, Wells Fargo, or Bank of America? I would choose whichever I thought was performing better and Goldman Sachs because of its trading outfit.

The two big boys in the space are JPMorgan Chase and Goldman Sachs. There are a lot of similarities.

So, let’s compare.

Just a couple of basic numbers to begin with.

JPMorgan Chase’s market capitalization is huge at $647 billion versus Goldman Sachs at $158 billion.

So, JPMorgan is a much bigger company in terms of presence.

JPMorgan Chase’s revenue is much larger at $168.7 billion for the trailing twelve months.

And for Goldman Sachs, we’re talking about $53 billion in revenue.

JPMorgan also takes the profit margin battle at 35.38% for the twelve-month trailing. That’s the profit margin averaged over the last four quarters.

And for Goldman, it’s 28%.

The return on equity is an important measure for banks. JPMorgan Chase beats Goldman Sachs by 17.35% versus Goldman’s return on equity at 12.26%.

You’d expect Goldman to have a better equity return, but that is not the case. That goes to JPMorgan.

So far, everything goes to JPMorgan.

However, we have a little bit of disparity in quarterly revenue growth.

Year over year, JPMorgan achieved 4.8%. Goldman hit 6.3%.

Quarterly earnings growth year over year for JPMorgan landed at 9.1%. And for Goldman, it was 14.74%.

Goldman has better earnings and revenue growth, but not by much.

They both pay dividends. The forward dividend yield on JPMorgan is 2.4%, with a 25% payout ratio.

It’s similar for Goldman, with a 2.36% yield on a 27% payout ratio.

So there’s not much there on either one. But dividends are obviously safe.

Now, I want to get into a couple of numbers here from the latest quarterly data.

I’m just going to let the cat out of the bag.

JPMorgan Chase beats on all of them.

In terms of net interest income, JPMorgan Chase hit $23.4 billion.

Again, it has a much bigger capital base to work off of, including loans, commercial banking deposits, etc.

Goldman hit $1.41 billion in net interest income.

Now, here’s a more apples-to-apples comparison.

Equity trading revenue at JPMorgan Chase for the quarter was $3.8 billion. Goldman Sachs achieved $4.19 billion, but Goldman’s a trading powerhouse.

Interestingly, JPMorgan’s $3.8 billion in equity trading revenue was up 48% year over year.

Though they beat on the actual number, Goldman’s was up 27% year over year.

So, JPMorgan Chase had a much bigger jump in equity trading revenue year over year – 48% versus Goldman’s 27%.

In FICC, revenue, which is fixed income, currencies, and commodities, JPMorgan Chase brought in $5.8 billion, up 8% on a year-over-year basis.

Goldman brought in $4.4 billion, up 2% YoY.

So, JPMorgan Chase has it there.

JPMorgan pulled in $2.2 billion in investment banking fees, up 12%. And here’s the killer. Investment banking fees for Goldman were $1.91 billion, down 8%.

So, guess what, people? I’m going to tell you the way it is. It’s JPMorgan Chase.

The charts look the same. So, I won’t bore you with them.

From its high on February 14th to its low on April 7th, JPMorgan Chase fell 28%.

Goldman Sachs fell 36.2% from its high on February 18th to April 7th.

So while JPMorgan fell 28%, Goldman fell 36%.

Using yesterday’s closing price, JPMorgan is down 16.8% from its highs, and Goldman is down 24.6%. So it hasn’t recovered as well.

So there you have it, people.

As far as JPMorgan Chase versus Goldman Sachs, go with JPMorgan Chase.

I’d buy that and not Goldman.

Cheers, everybody.

Catch you next week.