JP Morgan vs. Goldman Sachs: Performance and Outlook

By
Dan Moskowitz
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Dan Moskowitz is a freelance financial writer who has 4+ years of experience creating content for the online reading market.
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Updated June 12, 2023
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Marguerita Cheng
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Reviewed by Marguerita Cheng
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Marguerita is a Certified Financial Planner (CFP), Chartered Retirement Planning Counselor (CRPC), Retirement Income Certified Professional (RICP), and a Chartered Socially Responsible Investing Counselor (CSRIC). She has been working in the financial planning industry for over 20 years and spends her days helping her clients gain clarity, confidence, and control over their financial lives.
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JPM and GS: An Overview

JP Morgan Chase (JPM) and Goldman Sachs (GS) are respected investment banks. From 2017 to 2021, JP Morgan and Goldman Sachs saw rising stock performance based on low-interest rates and Federal Reserve policies. JPMorgan shares rose 148% over the five years, while Goldman Sachs saw a 131% increase, overshadowing the S&P 500 return of 125%.

In 2022, both companies saw their stock prices fall with rising inflation and Federal Reserve interest rate hikes. While the Dow Jones Industrial Average (DJIA) dropped 8.8% during the year, Goldman Sachs stock fell 10.2%, and JP Morgan's stock price ended around 15.6% lower by year-end.

For the 2023 outlook, JPM is not expecting a recession and predicts the company will have a mild to moderate recessionary valuation. The Investment Strategy Group within Goldman Sachs Wealth Management expects inflation to level, central banks to end tightening policies, and the markets to be less turbulent than in 2022.

Key Takeaways

  • Goldman Sachs pays a higher dividend yield than JP Morgan Chase.
  • The Market Cap of JPM is over 3.5 times the size of GS.
  • Both companies expect inflation to level in 2023 with less turbulent market activity.

JP Morgan Chase Performance

Key JPM Data
Market Cap $412 billion
52-week Range $101-$144
P/E Ratio 10.4
Return on Equity  14.27%
Dividend Yield 2.8%
As of June 12, 2023 per Yahoo! Finance

For the first quarter of 2023, net revenue was $39.3 billion, up 25%. Net interest income (NII) was $20.8 billion, up 49% and driven by higher rates and offset by lower deposit balances compared to the prior year. 

CEO Jamie Dimon sees the U.S. economy on healthy footing as consumers are spending, and businesses are thriving, but the banking industry turmoil remains.

Goldman Sachs Performance

Key GS Data
Market Cap $113 billion
52-Week Range $278-$390 
P/E Ratio 12.10
Return on Equity 9.01%
Dividend Yield 2.83%
As of June 12, 2023 per Yahoo! Finance

For the first quarter of 2023, the Goldman Sachs Group, Inc. reported net revenues of $12.22 billion and net earnings of $3.23 billion. Net revenues included a loss of approximately $470 million due to a partial sale of the Marcus loans portfolio and the transfer of the remainder of the portfolio held for sale.

Analysts at Goldman Sachs suggest that inflation could recede without a recession as growth will gradually reverse the overheating labor market and bring down wage growth and inflation.

In What Business Sectors Does JP Morgan Participate?

J.P. Morgan is a leader in investment banking, commercial banking, financial transaction processing, and asset management in the United States and globally. 

What Services Does Goldman Sachs Offer?

Goldman Sachs provides asset and wealth management solutions, financial advisory services, and platform solutions.

What Are the Main Differences Between JP Morgan and Goldman Sachs?

Both banks generate a sizable portion of revenues from market-making. However, Goldman Sachs is more dependent on such business. JPMorgan's revenue streams are a bit more diversified. JP Morgan has over three times the amount of assets as Goldman Sachs and generates over three times the net revenue.

The Bottom Line

JP Morgan and Goldman Sachs generate a sizable portion of revenues from market-making and have a sizable investment banking business. JP Morgan has a suite of lending-related operations, which include consumer lending, credit cards, and mortgages.

Article Sources
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  1. Market Watch. "Goldman Sachs CEO Pay Drops 30% After Profit Falls 48% and Share Price Loses 10% in Tough 2022."

  2. Yahoo Finance. "J.P. Morgan Chase & Co. Historical Prices January 2022 to December 2022."

  3. Seeking Alpha. "J.P. Morgan Chase: Don't Panic if It Falls Again."

  4. Goldman Sachs. "2023 Outlooks."

  5. JP Morgan Chase & Co. "1Q23 Earnings Press Release."

  6. Goldman Sachs. "1Q23 Earnings Release."

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