Wall Street is witnessing a fresh surge in shareholder rewards as America’s top banks flex their financial muscle. 

In the wake of the Federal Reserve’s 2025 stress test, which challenged banks to weather a hypothetical recession featuring a 10% unemployment rate and a staggering $550 billion in projected losses, the nation’s largest lenders have emerged not just unscathed, but emboldened. 

All 22 tested banks maintained a robust average Common Equity Tier 1 (CET1) capital ratio of 11.6%, far above the required 4.5% threshold. This resilience is fueling a fresh wave of dividend hikes across the banking sector.

With the stage set by regulatory triumph and market momentum, the spotlight now shifts to the banks leading this charge. Let’s dive into these 3 bank stocks.

Goldman Sachs (GS)

Goldman Sachs (GS) recently announced a 33% increase in its quarterly dividend, raising the payout from $3.00 to $4.00 per share effective July 2025. 

GS stock is currently up 22% year-to-date and 48% over the past 52 weeks. It has a market capitalization of $214 billion. 

Goldman reported net earnings of $4.74 billion for Q1 2025, with diluted EPS of $14.12 and an annualized ROE of 16.9%. Net revenues reached $15.06 billion, up 6% year-over-year, driven by record results in equities and strong performances in fixed income and debt underwriting. Assets under supervision climbed to a record $3.17 trillion. 

Goldman Sachs is expanding its footprint in private credit and private equity. The firm has launched a new Capital Solutions Group to integrate and broaden its financing, origination, structuring, and risk management offerings within its Global Banking & Markets division. This initiative aims to capture greater market share in higher-margin businesses and further diversify revenue streams, which is increasingly important as traditional investment banking faces cyclical challenges.

Looking ahead, analysts expect Q2 earnings of $9.37 per share and full-year EPS of $44.16, both reflecting solid growth. Analyst sentiment remains positive, with 22 surveyed rating GS as a consensus “Moderate Buy.” The average price target is $624.89, below its current trading price. 

JPMorgan Chase (JPM)

JPMorgan Chase (JPM) announced a 7% increase to its quarterly dividend in June, bumping the payout from $1.40 to $1.50 per share for the third quarter. This move, paired with a newly authorized $50 billion share repurchase plan, signals management’s confidence in the bank’s capital position and its ability to generate consistent returns for shareholders.

JPMorgan’s shares are up18.6% year-to-date and 36.9% over the past 52 weeks. 

The bank is making moves to capture more business from high-net-worth clients. JPMorgan recently restructured its private banking division, appointing David Frame as global CEO of the private bank. 

This renewed focus on wealth management is timely, given the rising demand for personalized financial services among affluent customers. It’s a logical extension of JPMorgan’s strengths and should help further diversify its revenue base.

JPMorgan reported net income of $14.6 billion for the first quarter of 2025, up 9% from the prior year, with EPS at $5.07. Managed revenue hit $46 billion. Average loans and deposits both grew 2% year-over-year, while the bank’s CET1 capital ratio remained robust at 15.4%. 

Looking ahead, analysts expect Q2 earnings of $4.48 per share and full-year EPS of $18.62, both showing modest growth. Analyst sentiment is positive, with 26 surveyed rating JPMorgan as a consensus “Moderate Buy.” The average price target is $280.16, also below its current share price. 

Morgan Stanley (MS)

Morgan Stanley (MS) announced an 8.1% increase to its quarterly dividend in June, lifting the payout to $1.00 per share beginning in the third quarter. This marks the 11th consecutive year of dividend growth for the company. 

The stock’s performance has been robust, with shares up 13.6% year-to-date and 39% over the past 52 weeks. 

Morgan Stanley reported record net revenues of $17.7 billion for Q1 2025, up from $15.1 billion a year ago. Net income rose to $4.3 billion, or $2.60 per diluted share, with a return on tangible common equity (ROTCE) of 23%. The firm’s wealth management segment added $94 billion in net new assets, bringing total client assets to $7.7 trillion. 

Strategically, the firm is also deepening its partnership with Mitsubishi UFJ Financial Group (MUFG), expanding joint ventures in Japanese equity research, sales, and execution services. This move strengthens Morgan Stanley’s foothold in Asia and aligns with its goal of building a more diversified, global business model — a key lever for growth as competition in global markets intensifies.

Looking ahead, analysts expect Q2 earnings of $1.95 per share and full-year EPS of $8.54, both reflecting annual growth above 7%. Analyst sentiment is broadly positive, with the 23 surveyed rating Morgan Stanley as a “Moderate Buy.” The average price target is $132.83 is also below its current share price. 

Conclusion

In short, all three banks are showing real strength with bigger dividends, solid earnings, and smart strategic moves. While their stocks have run up and may be priced for perfection in the short term, their fundamentals and capital returns look strong enough to support further gains over time. 

On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.