Financial Analysis: Capital One Financial (COF) vs. Its Rivals

Capital One Financial (NYSE:COF) is one of 120 public companies in the “Consumer Finance” industry, but how does it compare to its peers? We will compare Capital One Financial to related companies based on the strength of its dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Institutional and Insider Ownership

89.8% of Capital One Financial shares are owned by institutional investors. Comparatively, 45.7% of shares of all “Consumer Finance” companies are owned by institutional investors. 0.8% of Capital One Financial shares are owned by company insiders. Comparatively, 22.0% of shares of all “Consumer Finance” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Capital One Financial and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Capital One Financial	$63.01 billion	$2.45 billion	11.65
Capital One Financial Competitors	$65.54 billion	$385.17 million	6.15

Capital One Financial’s peers have higher revenue, but lower earnings than Capital One Financial. Capital One Financial is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Capital One Financial and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital One Financial	13.70%	11.64%	1.94%
Capital One Financial Competitors	10.33%	-15.81%	1.99%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Capital One Financial and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital One Financial	0	4	20	0	2.83
Capital One Financial Competitors	893	3362	5295	275	2.50

Capital One Financial currently has a consensus target price of $256.50, suggesting a potential upside of 30.00%. As a group, “Consumer Finance” companies have a potential upside of 20.33%. Given Capital One Financial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Capital One Financial is more favorable than its peers.

Risk & Volatility

Capital One Financial has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Capital One Financial’s peers have a beta of 1.26, meaning that their average share price is 26% more volatile than the S&P 500.

Dividends

Capital One Financial pays an annual dividend of $3.20 per share and has a dividend yield of 1.6%. Capital One Financial pays out 18.9% of its earnings in the form of a dividend. As a group, “Consumer Finance” companies pay a dividend yield of 6.1% and pay out 34.4% of their earnings in the form of a dividend.

Summary

Capital One Financial beats its peers on 9 of the 15 factors compared.

Capital One Financial Company Profile

Capital One Financial Corporation is a bank holding company that provides credit cards, consumer banking, auto financing and commercial banking services. Its offerings include credit cards, deposit accounts, loans and financial services for businesses. The company traces its roots to a credit card business established within Signet Banking Corporation in 1988 and became an independent company in 1994. Capital One is headquartered in McLean, Virginia, and serves customers primarily in the United States, with credit card operations also in the United Kingdom.