As everyone knows, JPMorgan Chase (JPM) has been absolutely crushing the market compared to its competitors, and has reported $5.4 billion for earnings in Q1, and is continuing to look strong. As the top financial institution on Wall Street it serves as a sort of indicator for how the market is operating, and the good faith on credit card and mortgage owners to pay on time demonstrates a quantitative backing behind the speculation that the market is looking bullish. A large part of this is due to its untouched reserves, as well as the aforementioned successful collections on loans and credit card debts.
Nobody can really deny the strong pace that JPMorgan Chase is keeping, so I will remind you that all of its preferred series are always a definite suggestion to buy, especially the JPM-I preferred stock.
Citigroup (C), however, has also maintained a strong contention and has relevant claims to its own respective throne. Citigroup is not quite to the monumental standards of success that JPMorgan Chase is enjoying right now, however according to its posting of its first quarter earnings, is outperforming JPMorgan Chase, at least in the investment banking department. Citigroup's Chief Executive Officer, Vikram Pandit, has apparently been hard on his company despite the better-than-expected results for the quarter, and I think this speaks very well for the future of the corporation.
These major financial groups have been facing highly challenging times with more uncertainty in the market than ever before regarding the post housing market crash world, but in order to be performing well they need leadership that can look at the bottom line instead of getting lost in complacency of marginally successful improvements, and in this way I think that Vikram Pandit is working very well for Citigroup. From a personal standpoint, this allows me to adopt an increasingly bullish stance on Citigroup, and I think we will see the company continue to develop.
It is also worth noting the victory Citigroup had in investment banking over JPMorgan Chase, and in that we are learning as investors how Wall Street's financial corporations are turning more and more into a niche market. Companies that have the ability and foresight to specialize and capitalize on their strong suits will be seeing more growth as we settle into the new landscape of the financial market. Take a long hard look at Citigroup's series J stock. It should be performing very well.
Speaking of challenges in the leadership and adjusting to the new market economy, Goldman Sachs (GS) might be facing a more tumultuous future than expected because of the power struggle which seems to be arising out of the dust of the 2008 housing market epidemic. While not highly publicized, this high profile competition of giants has caused a number of analysts and the like to speculate about the future of the company, or more specifically its leadership.
Despite all of this, business as usual continues and the lawsuits haven't stopped coming by Goldman Sachs' way. While this most recent lawsuit, which pertains to a film production company which Goldman Sachs acquired, is not the end of the world, the question is: How could the potential change of hands destabilize the company at large, and what will the permanent damage be?
In the past I have highly recommended the benefits that owners of Goldman Sachs' series B preferred stocks have enjoyed, however I am somewhat hesitant to continue to do so in light of recent developments. While it is true that Goldman Sachs will ultimately survive this latest news, like so many other storms the seemingly ancient company has weathered in the past, I would recommend holding off on buying its preferreds for now until we can a couple things. The first is the basic question of whether a change in leadership will occur. The second is: if a change of leadership does occur, how will the new leader's direction impact the company's ability to pay dividends.
Like Citigroup and JPMorgan Chase, Wells Fargo (WFC) has seen a solid first quarter, and despite concerns about the institutional value of Goldman Sachs, it is looking like a good time to jump in to preferreds for the financial market. Regarding the benefits of investing in Wells Fargo, it has even surpassed most banks in terms of earnings for the first quarter. In the past I have discussed my extremely optimistic speculation of Wells Fargo in relation to creative branding among other things, and this is the exact kind of quantitative evidence I wanted to see to back up my ideas.
In the past I have recommended Wells Fargo's series J preferred stocks, and I can definitely still express optimism for the company's ability to return dividends in spades. It seems like investment in preferred stocks such as these issued by Wells Fargo will continue to be able to pay out dividends well into the future.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.