Reviewing Morgan Stanley (NYSE:MS) & JPMorgan Chase & Co. (NYSE:JPM)

Morgan Stanley (NYSE:MS) and JPMorgan Chase & Co. (NYSE:JPM) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.

Dividends

Morgan Stanley pays an annual dividend of $4.00 per share and has a dividend yield of 2.4%. JPMorgan Chase & Co. pays an annual dividend of $6.00 per share and has a dividend yield of 2.0%. Morgan Stanley pays out 41.0% of its earnings in the form of a dividend. JPMorgan Chase & Co. pays out 29.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Morgan Stanley has raised its dividend for 12 consecutive years and JPMorgan Chase & Co. has raised its dividend for 15 consecutive years.

Risk & Volatility

Morgan Stanley has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, JPMorgan Chase & Co. has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.

Profitability

This table compares Morgan Stanley and JPMorgan Chase & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Morgan Stanley	13.85%	16.55%	1.25%
JPMorgan Chase & Co.	20.90%	17.18%	1.31%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Morgan Stanley and JPMorgan Chase & Co., as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morgan Stanley	0	9	6	3	2.67
JPMorgan Chase & Co.	3	9	14	2	2.54

Morgan Stanley currently has a consensus target price of $168.23, indicating a potential upside of 2.72%. JPMorgan Chase & Co. has a consensus target price of $322.27, indicating a potential upside of 7.33%. Given JPMorgan Chase & Co.’s higher possible upside, analysts clearly believe JPMorgan Chase & Co. is more favorable than Morgan Stanley.

Valuation and Earnings

This table compares Morgan Stanley and JPMorgan Chase & Co.”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Morgan Stanley	$107.29 billion	2.44	$13.39 billion	$9.75	16.80
JPMorgan Chase & Co.	$278.91 billion	2.96	$58.47 billion	$20.19	14.87

JPMorgan Chase & Co. has higher revenue and earnings than Morgan Stanley. JPMorgan Chase & Co. is trading at a lower price-to-earnings ratio than Morgan Stanley, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

84.2% of Morgan Stanley shares are held by institutional investors. Comparatively, 71.6% of JPMorgan Chase & Co. shares are held by institutional investors. 0.2% of Morgan Stanley shares are held by insiders. Comparatively, 0.5% of JPMorgan Chase & Co. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

JPMorgan Chase & Co. beats Morgan Stanley on 12 of the 18 factors compared between the two stocks.

About Morgan Stanley

Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia. It operates through Institutional Securities, Wealth Management, and Investment Management segments. The Institutional Securities segment offers capital raising and financial advisory services, including services related to the underwriting of debt, equity, and other securities, as well as advice on mergers and acquisitions, restructurings, real estate, and project finance. This segment also provides equity and fixed income products comprising sales, financing, prime brokerage, and market-making services; foreign exchange and commodities; corporate and commercial real estate loans, commercial mortgage and secured lending facilities, and financing for sales and trading customers, and asset-backed and mortgage lending; and wealth management services, investment, and research services. The Wealth Management segment offers financial advisor-led brokerage, custody, administrative, and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration; annuity and insurance products; securities-based lending, residential real estate loans, and other lending products; banking; and retirement plan services to individual investors and small to medium-sized businesses and institutions. The Investment Management segment provides equity, fixed income, alternatives and solutions, and liquidity and overlay services to benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors, corporations, and individuals through institutional and intermediary channels. The company was founded in 1924 and is headquartered in New York, New York.

About JPMorgan Chase & Co.

JPMorgan Chase & Co. is a financial holding company, which engages in the provision of financial and investment banking services. It focuses on investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. It operates through the following segments: Consumer and Community Banking (CCB), Commercial and Investment Bank (CIB), Asset and Wealth Management (AWM), and Corporate. The CCB segment originates and services mortgage loans. The CIB segment makes markets and services clients across fixed income, foreign exchange, equities, and commodities. The AWM segment provides initial capital investments in products such as mutual funds and capital invested alongside third-party investors. The Corporate segment manages its liquidity, funding, capital, structural interest rate, and foreign exchange risks. The company was founded in 1799 and is headquartered in New York, NY.