JPMorgan

This stock trades at a still reasonable 12.0 times estimated 2021 earnings. JPMorgan Chase & Co. (NYSE: JPM) is one of the leading global financial services firms and one of the largest banking institutions in the United States, with about $2.6 trillion in assets. The company as it is today was formed through the merger of retail bank Chase Manhattan and investment bank J.P. Morgan.

The firm has many operating divisions, including investment and corporate banking, asset management, retail financial services, commercial banking, credit cards and financial transaction services.

Top analysts are very positive on JPMorgan, largely because the industry titan faces a continued broad recovery in nearly every aspect of its business. It has a leading M&A advisory and capital markets product set and market share. It has a massive footprint of corporate and commercial banking customers. And it has a sizable wholesale payments businesses. The bank has proven that it has the wherewithal to invest continually in people, products, and platforms to further its market share base, extending its competitive advantage versus most peers.

The dividend yield is 2.35%. Wells Fargo’s $210 price objective is a Wall Street high. The consensus price target is $173.86, and JPMorgan Chase stock closed at $170.47 on Tuesday.

Morgan Stanley

This is another of Wall Street’s white-glove firms, and it may be among the best buys among the banking and investment stocks. Morgan Stanley (NYSE: MS) is a global investment bank with leading positions in investment banking (M&A and equity underwriting), equity trading and wealth management, which contributes nearly 50% of firmwide revenues. The firm also has an asset management business, which adds to the lower-risk business profile the firm has pursued since the financial crisis.

Last year, this Wall Street investment bank agreed on a $13 billion purchase of discount brokerage E-Trade. With 5.2 million customers, it was once a revolutionary platform that “helped usher in a dramatic shift among financial services firms” and fueled the rise of indexes and exchange-traded funds, making investing vastly easier for do-it-yourself investors.

Investors are paid a 2.68% dividend. Jefferies has set a $121 price target for Morgan Stanley stock. The median price target is $113, and shares closed Tuesday’s trading at $104.66.

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It’s always a bit safer to buy shares after the numbers have been posted, and the home run results for the sector this past quarter show that strong momentum should remain a tailwind. So will interest rates that are creeping higher. These five stocks have all done extremely well, so it may make sense to scale in capital and buy partial positions now and see if we don’t get a correction in the fourth quarter to add more shares.