Jim Cramer Considers Morgan Stanley a “Tremendous” Investment Bank

Morgan Stanley (NYSE:MS) is one of the 22 stocks Jim Cramer recently talked about. Highlighting its recent dividend boost and buyback program, Cramer said:

“Morgan Stanley said they’re putting through an 8.1% dividend hike, which translates to a 2.8% yield with the stock at these levels. They also announced a $20 billion buyback, which works out to be almost 9% of the bank’s current market capitalization, generous… And Morgan Stanley, the most expensive at 3.1 times book value. Remember, most expensive doesn’t mean bad, it’s just, it’s a fact. To give these numbers some context, these price to book multiples are basically the markets assigning a value to the quality of these banks’ franchises, what the businesses are worth beyond just their assets and liabilities…

Goldman Sachs, JPMorgan, and Morgan Stanley have the most valuable franchises… Morgan Stanley and Goldman are two tremendous investment banks. And Morgan Stanley’s also got a fabulous asset management business known for its consistency and its stickiness… And look, when you judge the bank stocks on a price-to-earnings basis, you get a similar story…

Goldman Sachs, JPMorgan, and Morgan Stanley are once again on the more expensive side, all selling for roughly 16 times earnings. To put that in perspective, though, the overall S&P 500 currently trades at close to 24 times this year’s earnings estimates. So, wow, these are outta whack. I would say they’re cheap…

Still, with the banks featuring discount multiples compared to the overall market, you know what, I’m not so sure that the good times… necessarily have to end for this group. I think they can continue moving higher. The bottom line: In this environment, I bet the big banks are some of the best investments this year, yet still very inexpensive, at least on earnings versus the rest of the market, have more room to run, maybe much more.”

A panoramic view of a financial institution, representing the number of corporations who trust the company’s services.

Morgan Stanley (NYSE:MS) is a financial services company that provides capital raising, financial advisory, brokerage, and investment management services.

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