JPMorgan vs. Goldman Sachs: What's the Difference?

JPMorgan Chase vs. Goldman Sachs: An Overview

JPMorgan Chase (JPM) and Goldman Sachs (GS) are two of the largest and most respected investment banks. Both have seen rising stock performance over the past several years, benefiting largely from low-interest rates and Federal Reserve policies. Below, we'll take a look at where both companies are headed and the likelihood of positive momentum with interest rates expected to rise even further.

During the period covering 2017-2021, the stock prices of JPMorgan and Goldman Sachs tell a similar story. JPMorgan shares are up 148% over the last five years as of November 2021, while Goldman Sachs’ is up 131%, versus the S&P 500 return of 125% over the same time period.

JPMorgan Chase

In JPMorgan’s third-quarter 2021 results, the company had a net income of $11.7 billion on revenue of $29.7 billion with a net interest income of $13.2 billion. This is compared to the $9.4 billion in net income generated during the third quarter of 2020.

JPMorgan generated most of its 2020 revenues from asset management and market-making. Its asset management business generated $18.2 billion of the total $65 billion generated for the entire year. Meanwhile, market-making brought in $18 billion.

Goldman Sachs

In the third quarter of 2021, Goldman Sachs reported net revenue of $13.6 billion, versus $10.8 billion in the third quarter of 2020, and a net income of $5.4 billion, versus $3.4 billion in the previous year's third quarter. It reported a net interest income of $1.6 billion in the third quarter of 2021, versus $1.1 billion in the third quarter of 2020.

Goldman Sachs' highest revenue-generating business in 2020 was marketing making, accounting for $15.5 billion of its $39.8 billion in revenue for that year. The second and third were investment banking and investment management at $9.1 billion and $6.9 billion, respectively.

Special Considerations

Both banks generate a sizable portion of revenues from market-making. However, Goldman Sachs is more dependent on such business. JPMorgan's revenue streams are a bit more diversified. Both have a sizable investment banking business, which brought in $9 billion in revenue in 2020 for each company. Then JPMorgan has a suite of lending-related businesses that generate nearly $14 billion in revenue—which includes consumer lending, credit cards, and mortgages.

Goldman does have the better return on equity, but JPMorgan has over three times the amount of assets as Goldman and generates over three times the amount of net income. Overall, the two compete in the investment banking market, but JPMorgan dominates the asset management and lending side.