Jim Cramer Recommends Buying Goldman Sachs

The Goldman Sachs Group, Inc. (NYSE:GS) is one of the stocks that Jim Cramer shed light on. The company was mentioned during the episode, as Cramer commented:

“Yeah… both (GS and COF) of these are buys … Why not buy Goldman Sachs? They’re very much involved (in the booming IPO market), and it was down today.”

A close-up of a financial advisor giving advice to a customer, demonstrating the importance of consumer and wealth management.

Goldman Sachs (NYSE:GS) provides financial advisory, lending, and investment services across a range of asset classes, along with wealth management, private banking, and transaction banking solutions. While discussing the bank stock, Cramer mentioned the company during the July 2 episode and said:

“Goldman Sachs, which we own for the Charitable Trust… let’s just say it’s had a smaller dividend payout than its peers for a long time, but also just announced a major 33% dividend boost. Now, even after that, the stock only yields 2.23%, but that is no longer chintzy… Goldman trades at 2.22 times book value… Goldman Sachs, JPMorgan, and Morgan Stanley have the most valuable franchises… Morgan Stanley and Goldman are two tremendous investment banks…

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… The strongest, Cramer fave, and former employer, Goldman Sachs, has rallied 25% [for the year]…

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. As for which ones you should own, well, that’s a personal choice. I’m very happy with Goldman Sachs and Wells Fargo. We own those for the Charitable Trust.”

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey