By coinnews 
00:00 Speaker A
as you look at valuations across the space, I’m just looking at the XLF. It’s about a 3% so far this year. Broadly, valuations you would characterize as what?
00:09 Speaker B
You know, it’s one of those things, I’ll take up three when the S&P is down four at this point in time, right? So when we look at the actual valuation of the S&P, it’s still trading at a 20 plus multiple on forward earnings, whereas banks are at roughly around 11. So you’re almost half the valuation of the current market. So you’re getting a very solid deal on very strong stocks that are still positive for the year.
00:31 Speaker A
So strong balance sheets, better valuations. They don’t pay tariffs, financials. Let’s talk about some names. JP Morgan, why would that, why would that scream a buy for you?
00:40 Speaker B
One of the things that we really look for at this moment in time to define quality are very large scale balance sheets that have lots of cash on hand, low levels of debt, and multiple lines of products where they can generate revenue from different customers, but also selling different products. JP Morgan checks all those boxes and spades. They had a better than expected investment bank quarter last quarter, there could be more of that in the horizon, which is much more profitable business. But their deposits have remained strong, their net interest income is getting stronger as we go by, and they’re one of the best in the business at returning capital to shareholders.
01:13 Speaker A
What about BNY? That’s another name that you screen for.
01:17 Speaker B
Yes, another one that’s even higher quality right now when it comes to that cash to debt on ratio on their balance sheet. They’ve got almost twice the amount of deposits they do debt. They’ve been growing their dividend at 12% a year over the last 5 years. So they’ve been really strong and solid in those quality types of factors. Now, I know these aren’t the sexiest stocks, but in a market like this, sometimes boring
01:39 Speaker A
Hey, that’s okay, Brian. Boring can work.
01:42 Speaker B
Boring is best.
01:44 Speaker A
How about an insurance name that popped up to MetLife?
01:48 Speaker B
Yeah, so again, just getting out of the mega bank space, but looking at MetLife, again, a company that’s done really well diversifying their product line. They’re actually doing very well in the group insurance market globally, not just here in the US. So they’ve been able to take their balance sheet, grow it by having organic growth through different lines of product and also creating different relationships in different markets with customers that they didn’t have before. So that organic growth means less debt on the balance sheet, low short interest, and again, a strong dividend yield.