COF's lower SCB boosts capital flexibility, paving the way for growth investments, steady dividends, share repurchases and stronger returns.
Capital One (COF) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
Capital One Financial Corporation's preferred stocks are undervalued relative to peers, despite similar coupon yields and investment-grade credit ratings. COF.PR.J and COF.PR.L offer attractive yields of 6.64% and 6.56%, respectively, both trading below par and with wide yield spreads. Compared to other major bank preferreds, COF's preferreds have contracted less in spread, indicating potential for price appreciation.
COF hits a 52-week high after passing the Fed's stress test and posting strong gains, but valuation raises caution.
Capital One Financial has reportedly entered a “new era” after completing its acquisition of Discover Financial Services. [contact-form-7] With the acquisition, Capital One grew in size and added a debit and credit card network, which could “supercharge” its banking and card businesses, The Wall Street Journal (WSJ) reported Friday (June 27).
Capital One's $35 billion all-stock merger with Discovery Financial makes it the eighth-largest U.S. bank and expands into the payment network vertical. Despite macroeconomic uncertainties, the strength of U.S. consumers and rising consumer sentiment support a bullish outlook for Capital One's core credit card business. I rate Capital One as a "buy," due to its valuation, and with just two rate cuts expected in 2025, their asset-sensitive balance sheet is likely to be less affected.
COF rides high on Discover buyout, strong card business and rising NII, but asset quality and rising costs remain woes.
apital One Financial Corporation (NYSE:COF ) Morgan Stanley US Financials, Payments & CRE Conference Call June 10, 2025 2:30 PM ET Company Participants Jeff Norris - Senior Vice President of Finance Richard D. Fairbank - Founder, Chairman, CEO & President Conference Call Participants Jeffrey David Adelson - Morgan Stanley, Research Division Jeffrey David Adelson All right, everybody.
Goldman Sachs added four stocks to the Conviction List in June. Three of the new stocks have 20% upside potential and pay reliable dividends.
COF rides on the credit card momentum and Discover deal gains, but rising costs and asset quality issues cloud the outlook.
Shares of Capital One Financial Corporation COF have lost 5.9% since the completion of the acquisition of Discover Financial Services on May 18. The $35-billion deal reshapes the landscape of the credit card industry, creating a behemoth (in terms of loan volume).
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