Can JPMorgan Chase Find Growth Overseas?
In today's world, most companies span several regions and sell across the world. As Foolish colleague Morgan Housel notes, 10 years ago, less than a third of S&P 500 revenue growth came from abroad. Today, that area makes up half of the S&P 500's growth.
And that number is growing. The truth is, investors regularly underestimate how much demand comes from abroad. More importantly, for large, multinational corporations that have already established a presence in their home markets, much of their future growth comes from abroad.
With that in mind, today we're looking at JPMorgan Chase (NYS: JPM) . We'll examine not only where its sales and earnings come from, but how its sales abroad have changed over time.
Where JPMorgan's sales were five years ago
Five years ago, JPMorgan produced 74% of its sales within the United States.
Source: S&P Capital IQ.
Where JPMorgan's sales are today
Today, despite the rest of its large corporate peers seeing the influence of foreign sales rise, JPMorgan's situation is little changed.
Source: S&P Capital IQ.
Why haven't JPMorgan's overseas revenues soared over the past five years? For one, the banking industry's turmoil has made aggressive expansion difficult. When companies are trying to shore up their balance sheets, growth prospects in new regions can fall to the back burner. Not only that, but JPMorgan's acquisition of Washington Mutual tacked on an even larger retail banking footprint in the United States.
However, while JPMorgan's sales to different regions haven't changed much in the past five years, its assets have been rapidly changing. Since 2008, the bank's European assets have risen from 20% to 25% while its American assets have fallen from 72% to 66%. So even without more sales to the region, JPMorgan's European exposure has been growing.
As for competitors, JPMorgan's sales profile is the most similar to Bank of America (NYS: BAC) , though Bank of America has seen its U.S. sales drop to 79% of sales from 89% a half-decade ago while JPMorgan's U.S. sales percentage kept growing.
Then there's Citigroup (NYS: C) , which counts just 37% of its sales from North America. The company appears the most geographically diversified of the larger American banks. That could give pause to investors who are looking to avoid the so-called "PIIGS" of Europe, but there doesn't appear to be a huge difference between Citi's assets in the countries and the level of assets held by other U.S. banks like Bank of America.
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At the time this article was published Eric Bleeker owns shares of no companies listed above. You can follow him on Twitter to see all of his technology and market commentary. The Motley Fool owns shares of JPMorgan Chase, Bank of America, and Citigroup. Motley Fool newsletter services have recommended buying shares of The Goldman Sachs Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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