- JPMorgan Chase’s Series DD and GG preferred shares are recommended due to better yields and lower call risk compared to Series EE.
- The bank’s Q4 earnings exceeded expectations, with a stable net interest yield and manageable loan to deposit ratio.
- Risks include credit card loan performance and call risk for preferred shares, but dividends remain secure.
- Preferred shares offer higher yields than CDs, making them an attractive, relatively safe investment amidst recent interest rate cuts.
Introduction
JPMorgan Chase (NYSE:JPM) is one of the largest banks in the world. In addition to offering common shares, the bank also offers preferred shares. Back in June, I profiled how investors could get better yields than CDs by buying the bank’s Series DD (NYSE:JPM.PR.D) and Series EE (NYSE:JPM.PR.C) preferred shares. Today, the spread between CD rates and JPMorgan’s preferred shares has grown due to the Federal Reserve’s recent interest rate cuts, and with the Series EE trading at a premium above call price plus one quarter of dividends, I’m recommending investors shift to the Series DD and/or Series GG (NYSE:JPM.PR.J) shares.
JPMorgan Earnings Results
Wall Street was very pleased with JPMorgan Chase’s fourth quarter earnings, which were released on Wednesday. The fourth quarter was the first quarter where interest rates were on the decline since the start of the pandemic. The bank’s asset yield dropped by 24 basis points to 5.31%, but the bank’s borrowing yield fell by a greater 32 basis points.
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