Despite the continuing low-interest-rate environment, the banking industry is rebounding, driven by a significant increase in financial transactions. So, banking giants Wells Fargo (NYSE:WFC) and JPMorgan (JPM) should benefit from the industry’s rebound. But which of these stocks is a better buy now? Read more to find out.One of the leading financial services companies, Wells Fargo & Company (WFC), provides diversified banking, investment, mortgage products and services, and consumer and commercial finance. It operates through four segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. In comparison, established financial services company JPMorgan Chase & Co. (NYSE:JPM) operates in four segments: Consumer & Community Banking; Corporate & Investment Bank; Commercial Banking; and Asset & Wealth Management.
Even though the near-zero interest-rate environment remains unchanged amid concerns over the pace of economic recovery, most banking stocks have rebounded this year, with rising financial transactions and capital market activities driving the non-interest component of their revenues. Furthermore, the Fed signaled two interest rate hikes as soon as late 2023. In addition, it recently indicated its willingness to reduce asset purchases before the end of the year, which should help banking companies expand their interest income. According to Globe Newswire, the global financial services market is expected to grow at a 9.9% CAGR to $22.5 trillion this year. Consequently, both WFC and JPM should benefit.
WFC’s shares have gained 17.2% in price over the past six months, while JPM’s shares have returned 4.3%. Also, WFC’s 80.1% gains over the past year are significantly higher than JPM’s 57.4% returns. Moreover, WFC is the clear winner with 51.5% gains versus JPM’s 31.5% over the past nine months.