JPM vs. GS: The Dividend Raiser That Won’t Flinch When Markets Crack
JPMorgan built its reputation as the safe megabank, yet one crisis revealed a dividend surprise that upends the conventional wisdom about which Wall Street giant actually protects retiree income when markets turn ugly.
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JPMorgan Chase (NYSE:JPM | JPM Price Prediction) or Goldman Sachs (NYSE:GS): which megabank should a retirement-focused income investor own right now? JPMorgan pays $1.65 a quarter today, and Goldman pays $5.00. The more revealing number comes from 2009, when JPMorgan cut its quarterly dividend to $0.05. Goldman kept paying $0.35 straight through the crisis. The bank with the strong reputation cut. The bank known for risk-taking held.
Dividends Today: Goldman Raises Faster and Yields Slightly More
JPMorgan lifted its quarterly payout to $1.65 from $1.50, a forward annual rate of $6.60. Trailing 12-month dividends total $6.00. Goldman raised its payout 11% to $5.00 from $4.50, a forward rate of $20.00 after $18.00 over the trailing year. Management says that dividend is up 25% versus a year ago and 150% over the last five years.
Per-share size misleads readers constantly. Yield equals the dividend divided by the share price, and Goldman trades at $911.25 against JPMorgan’s $335.34. On trailing payouts, Goldman yields 1.84% versus 1.77% for JPMorgan. That gap is thin. Both are dividend growers with modest current yields. Winner: Goldman, on the pace of its raises.
Crisis Test: The Safe Bank Blinked
JPMorgan’s quarterly dividend stood at $0.38 at the January 2, 2009 ex-dividend date. From the April 2, 2009 ex-date, it paid $0.05 and held that low level for roughly two years before rebuilding. Goldman paid $0.35 per quarter across every ex-dividend date from 2008 through 2011. A retiree living on JPMorgan checks watched income shrink to a nickel. A Goldman holder saw no break (the warning signs before a cut like that are the subject of a free report we put together on dividend traps). Winner: Goldman.
Why It Happened, and Why Risk Still Favors JPMorgan
Context matters. JPMorgan is a deposit-funded universal bank under far greater regulation, and the pressure it faced in 2009 differed in kind from Goldman’s. Today both banks run through the Federal Reserve’s annual stress test. Regulators model a severe recession, set a stress capital buffer, and dividends plus buybacks must fit above the resulting minimum. Earnings matter, but capital ratios set the ceiling on payouts. The 2009 record is evidence, and today’s regime determines the next test.
On that front, JPMorgan carries more protection. Its CET1 ratio (core capital against risk-weighted assets) was 14.1% at the end of the second quarter. Goldman’s was 12.9% against an 11.4% requirement, a 150 basis point cushion, with a 3.4% stress capital buffer through September of 2027.
Goldman also swings harder. Its beta is 1.283 versus 0.975 for JPMorgan, and over the past month Goldman fell 11.43% while JPMorgan slipped 6.23%. Goldman’s second-quarter net income jumped 78.03% on a capital markets surge, while JPMorgan’s adjusted EPS of $6.14 rose 13%. Jamie Dimon, CEO at the time of the July call, warned: “It’s getting close to as good as it gets. We just don’t know how long it’s going to last.” Goldman’s earnings ride that cycle more directly. Winner: JPMorgan.
Verdict: Goldman Earns the Income Crown
For an income investor, Goldman takes it. It yields slightly more, raises faster, trades at a forward P/E of 13 versus 14 for JPMorgan, and has the cleaner crisis record. JPMorgan fits the retiree whose top priority is a smaller drawdown in a selloff, since its lower beta and deeper capital buffer deliver exactly that.
The development that would flip the call: Goldman’s cushion over its capital requirement. If a future stress test lifts its buffer enough to close that 150 basis point margin, room for dividend growth tightens, and JPMorgan’s deeper capital becomes the stronger income foundation. Watch for the Fed’s next stress test results.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
