When you're researching JPMorgan Chase alternatives, you're really asking which financial institutions share a similar scale, business mix, and competitive position but might offer different risk-reward profiles. Finding the right stocks like JPM means comparing companies across dimensions like market capitalization, revenue diversification, profitability metrics, and shareholder returns. The goal isn't to find a clone. It's to find companies worth studying side by side so you can make more informed decisions.
Key takeaways
- The most comparable JPM competitors operate across multiple business lines: consumer banking, investment banking, asset management, and wealth management.
- When evaluating alternatives, focus on return on equity (ROE), net interest margin, efficiency ratio, and dividend yield rather than stock price alone.
- Market cap alone doesn't make two banks equivalent. Revenue mix and geographic exposure matter just as much.
- Smaller competitors may trade at lower valuations, but that discount often reflects differences in earnings quality or growth trajectory.
- You can use the Rallies Vibe Screener to filter for financial stocks that match specific profitability and valuation criteria.
Why look for alternatives to JPMorgan Chase?
JPMorgan Chase is the largest U.S. bank by assets, and its size makes it a default benchmark for the entire banking sector. But benchmarks aren't investments. If you already hold JPM or you're comparing it against peers, you need to understand what makes its competitors different, not just similar. Some investors look for alternatives because they want exposure to the same sector at a potentially lower valuation. Others want to diversify across multiple large banks rather than concentrating in one name.
There's also a practical angle. If JPM trades at a premium to its peers on metrics like price-to-book or price-to-earnings, understanding why that premium exists helps you decide whether it's justified or whether a competitor offers better value for similar fundamentals. You can pull up JPMorgan Chase's research page on Rallies.ai to see how its metrics stack up before diving into comparisons.
Which companies are the closest JPM competitors?
The most direct alternatives to JPMorgan Chase are other large, diversified U.S. banks that operate across consumer banking, corporate and investment banking, and wealth or asset management. Here are the names that come up most often in peer comparisons:
- Bank of America (BAC) — The second-largest U.S. bank by assets, with a heavy consumer banking footprint and a growing wealth management division through Merrill Lynch.
- Wells Fargo (WFC) — Primarily a consumer and commercial bank. Less investment banking exposure than JPM, which changes its revenue profile significantly.
- Citigroup (C) — More internationally focused than most U.S. peers, with a global consumer and institutional banking presence.
- Goldman Sachs (GS) — Historically an investment banking and trading powerhouse, now expanding into consumer banking and asset management.
- Morgan Stanley (MS) — Similar to Goldman in its investment banking roots, but its acquisition strategy has shifted its revenue mix heavily toward wealth and asset management.
Each of these stocks gets compared to JPM regularly, but they aren't interchangeable. The differences in business mix drive real differences in how they perform across economic cycles.
How to compare JPMorgan Chase alternatives by business model
Business model is where most surface-level comparisons fall apart. Two banks can have similar market caps but generate revenue in completely different ways. Here's what to look at:
Revenue diversification
JPMorgan Chase earns revenue from consumer banking (deposits, mortgages, credit cards), commercial banking, investment banking (advisory, underwriting), markets (trading), and asset and wealth management. A true peer should have at least three of these revenue streams at meaningful scale. Bank of America comes closest in terms of breadth. Wells Fargo skews heavily toward net interest income. Goldman Sachs and Morgan Stanley lean toward capital markets and fee-based revenue.
Net interest margin (NIM): The difference between what a bank earns on loans and what it pays on deposits, expressed as a percentage of interest-earning assets. Banks with higher NIM tend to be more sensitive to interest rate changes.
Geographic exposure
Citigroup stands out here. It generates a meaningful share of its revenue outside the United States, which exposes it to different economic cycles, currency risks, and regulatory environments. JPMorgan has international operations too, but its domestic business is proportionally larger. If you're looking for stocks like JPM with more global diversification, Citigroup is the obvious candidate. If you want a more U.S.-centric alternative, Wells Fargo or Bank of America fits better.
Fee income versus interest income
This split matters because it affects how a bank performs in different rate environments. Banks that rely more on fee income (asset management fees, advisory fees, trading revenue) tend to be less sensitive to rate cuts. Banks that depend on net interest income benefit when rates rise and feel pressure when rates fall. JPMorgan is relatively balanced. Goldman Sachs and Morgan Stanley lean heavily toward fees. Wells Fargo depends more on interest income.
What profitability metrics matter most when comparing banks?
Stock price comparisons are almost meaningless for banks. A $200 stock isn't "more expensive" than a $50 stock in any useful sense. Here are the metrics that actually tell you something:
Return on equity (ROE)
This is the single most watched profitability metric for banks. It measures how much profit a bank generates relative to its shareholders' equity. JPMorgan has historically posted ROE figures at or above the mid-teens, which is strong for a bank of its size. When evaluating JPMorgan Chase alternatives, compare their ROE over a full cycle, not just one quarter. A bank with a consistently lower ROE might deserve a lower valuation multiple.
Return on equity (ROE): Net income divided by average shareholders' equity. For banks, an ROE above 12-15% is generally considered strong. Below 10% often signals that a bank is struggling to earn its cost of capital.
Efficiency ratio
The efficiency ratio measures non-interest expenses as a percentage of revenue. Lower is better. A bank with a 55% efficiency ratio spends $0.55 to generate every dollar of revenue. JPMorgan typically runs a competitive efficiency ratio for its peer group. Wells Fargo has faced higher costs in recent years due to regulatory issues. Goldman Sachs and Morgan Stanley tend to have higher compensation expenses because of their investment banking and trading operations.
Return on tangible common equity (ROTCE)
ROTCE strips out goodwill and intangible assets from the equity base, giving a cleaner picture of how well a bank's core operations generate returns. This is particularly useful when comparing banks that have grown through acquisitions (which create goodwill on the balance sheet) versus banks that have grown organically.
How do valuations compare across JPM competitors?
Valuation is where the comparison gets interesting, and where many investors find opportunities. The two most common valuation metrics for banks are price-to-earnings (P/E) and price-to-book (P/B).
Price-to-book ratio
Banks are balance-sheet-heavy businesses, which makes book value a more meaningful anchor than it is for, say, a software company. A bank trading at 1.5x book value is priced differently than one trading at 0.8x book, and the gap usually reflects differences in profitability. As a rough framework: banks with higher ROE tend to trade at higher price-to-book multiples, and banks with lower ROE trade at discounts. If you find a bank with strong ROE trading at a below-average P/B, that might be worth investigating further.
Price-to-book ratio (P/B): The stock price divided by book value per share. For banks, a P/B above 1.0 generally means the market believes the bank earns more than its cost of equity. Below 1.0 suggests skepticism about future profitability.
Price-to-earnings ratio
P/E works for banks, but with caveats. Bank earnings can be volatile because of loan loss provisions, trading revenue swings, and one-time items. Compare P/E ratios over a normalized period rather than relying on a single snapshot. JPMorgan often trades at a premium P/E relative to peers like Citigroup or Wells Fargo. That premium reflects its more consistent earnings power, broader business mix, and management track record.
You can compare these ratios across all the major banks using the Rallies AI Research Assistant by asking it to pull valuation comparisons for specific tickers.
How do dividend yields stack up among alternatives to JPMorgan Chase?
Large banks are significant dividend payers, and dividend yield is one of the reasons income-focused investors look at the sector. But yield alone is a poor way to compare. You need context.
Dividend yield versus payout ratio
A higher yield isn't automatically better. If a bank's yield is high because its stock price dropped on bad news, that's a very different situation than a bank that has steadily increased its dividend over time. The payout ratio (dividends as a percentage of earnings) tells you how sustainable the dividend is. Banks that pay out 30-40% of earnings have more room to maintain dividends during downturns than banks paying out 60-70%.
Dividend growth trajectory
JPMorgan has a track record of consistent dividend increases, particularly after post-financial-crisis restrictions were lifted. Bank of America has also grown its dividend meaningfully from a low base. Citigroup has historically been more conservative with its dividend, partly due to restructuring costs and regulatory capital requirements. When comparing JPM competitors on dividends, look at the growth rate over the past five to ten years, not just the current yield.
For a deeper dive into how dividends factor into bank stock analysis, check out the stock analysis resources on Rallies.ai.
What are the risks of choosing one bank stock over another?
Every bank in this peer group shares certain risks: credit cycle exposure, interest rate sensitivity, and regulatory pressure. But the degree of exposure varies, and that's what makes the comparison useful.
- Credit risk concentration: Wells Fargo has heavier exposure to U.S. consumer and commercial real estate lending. Citigroup has more emerging market exposure. JPMorgan is more diversified across credit categories.
- Regulatory and legal risk: Wells Fargo has operated under an asset cap for years, limiting its growth. Goldman Sachs faces scrutiny on its consumer banking expansion. These are company-specific risks that affect earnings potential.
- Capital markets sensitivity: Goldman Sachs and Morgan Stanley see bigger earnings swings based on trading volumes and deal flow. In strong capital markets years, they can outperform. In quiet years, their earnings drop more sharply than consumer-focused banks.
- Interest rate sensitivity: Banks with larger deposit franchises and loan books (Bank of America, Wells Fargo) tend to see bigger earnings moves when rates change. Fee-driven banks are more insulated.
None of these risks make one bank objectively better or worse. They make each bank a better or worse fit depending on your own portfolio and what risks you already have exposure to. Use the Rallies portfolio tracker to see how adding a bank stock would affect your overall exposure.
Try it yourself
Want to run this kind of analysis on your own? Copy any of these prompts and paste them into the Rallies AI Research Assistant:
- I'm looking for alternatives to JPMorgan Chase — which banks or financial companies are similar in size and business model, and how do they compare on profitability, valuation, and dividend yield?
- What are the closest alternatives to JPMorgan Chase? What competitors should I compare it to?
- Compare the efficiency ratio, ROE, and price-to-book ratio of JPM, BAC, WFC, C, GS, and MS. Which ones trade at a discount to their historical average?
Frequently asked questions
What are the best stocks like JPM?
The most comparable stocks are Bank of America (BAC), Wells Fargo (WFC), Citigroup (C), Goldman Sachs (GS), and Morgan Stanley (MS). Each shares some overlap with JPMorgan Chase's business model, though none match its exact revenue mix. Bank of America is the closest in terms of diversified banking operations, while Goldman Sachs and Morgan Stanley lean more toward investment banking and wealth management.
Why does JPMorgan Chase trade at a premium to other banks?
JPMorgan typically commands a higher valuation because of its consistently strong return on equity, diversified revenue streams, and track record of navigating economic downturns. Investors generally pay more for predictability and quality. Whether that premium is justified at any given time depends on the size of the gap and whether peers are closing the profitability difference.
What JPM competitors have the highest dividend yield?
Among large-cap bank peers, dividend yields tend to cluster within a few percentage points of each other. The bank with the highest yield at any given time is often the one whose stock has underperformed, which inflates the yield mechanically. Rather than chasing the highest yield, compare payout ratios and dividend growth rates to assess sustainability.
How do I compare bank stocks on profitability?
Focus on return on equity (ROE), return on tangible common equity (ROTCE), and the efficiency ratio. ROE tells you how well the bank turns shareholder capital into profit. ROTCE gives a cleaner version by excluding goodwill. The efficiency ratio shows how lean the bank's operations are. Compare these metrics across a full economic cycle rather than relying on a single period.
Is Citigroup a good alternative to JPMorgan Chase?
Citigroup is one of the most common alternatives to JPMorgan Chase, particularly for investors who want more international banking exposure. Historically, Citigroup has traded at a lower valuation, which reflects its lower profitability metrics and ongoing restructuring efforts. Whether it's a good fit depends on your view of its turnaround progress and your tolerance for the execution risk involved.
Should I own more than one bank stock?
Owning multiple bank stocks can make sense if each one gives you exposure to a different part of the financial sector. For example, holding both a consumer-focused bank and a capital-markets-focused bank gives you diversification within the sector. However, all banks share common risks like credit cycle exposure and regulatory changes, so holding five bank stocks doesn't provide the same diversification as holding stocks across five different sectors.
How can I screen for JPMorgan Chase alternatives?
Use a stock screener to filter for companies in the banking or diversified financial services sector with market capitalizations above a certain threshold. Then narrow by profitability metrics like ROE above 10% and valuation metrics like price-to-book within a specific range. The Rallies Vibe Screener lets you filter using natural language descriptions, which can speed up this process.
What's the difference between a bank competitor and a bank alternative?
In investing context, a competitor is a company that competes with JPMorgan for the same customers and deals. An alternative is a stock you might consider instead of or alongside JPM in your portfolio. Most JPM competitors are also alternatives, but the distinction matters. A fintech company might be a business competitor to JPMorgan without being a useful portfolio alternative, because its risk profile and business model are too different for a direct comparison.
Bottom line
Researching JPMorgan Chase alternatives is really about understanding what makes each large bank different beneath the surface. Business model, revenue mix, profitability, valuation, and dividend policy all vary across the peer group, and those differences create real trade-offs for investors. The goal isn't to find a "better JPM." It's to understand the full landscape of large-cap banking stocks so you can build a portfolio that matches your own priorities.
To go deeper on individual comparisons and run your own analysis, explore the stock analysis section on Rallies.ai and use the AI Research Assistant to ask follow-up questions about any ticker in the peer group.
Disclaimer: This article is for educational and informational purposes only. It does not constitute investment advice, financial advice, trading advice, or any other type of advice. Rallies.ai does not recommend that any security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results. Before making any investment decision, consult with a qualified financial advisor and conduct your own research.
Written by Gav Blaxberg, CEO of WOLF Financial and Co-Founder of Rallies.ai.