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On Jul 6, Zacks Investment Research upgraded Capital One Financial Corp. (COF - Analyst Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Capital One has been witnessing rising earnings estimates following the announcement of a new share repurchase program, hike in dividend and better-than-expected first-quarter results. Moreover, this regional bank has a long-term earnings growth forecast of 8.0%.

On Jul 2, Capital One announced a share repurchase authorization of up to $1.0 billion, subsequent to the Federal Reserve’s approval of its capital plan in Mar 2013. However, the company will be allowed to undertake the repurchase program after it successfully completes the sale of Best Buy Co.’s credit-card business to Citigroup Inc. (C - Analyst Report). The company expects this deal to close in the third quarter of 2013.

Further, on May 2, Capital One hiked its quarterly dividend by 500% to $0.30, which was paid on May 23 to shareholders of record as on May 13.  Moreover, in Apr 2013, the company’s first-quarter 2013 earnings easily surpassed the Zacks Consensus Estimate, driven by a fall in operating expenses, partially offset by decline in revenues.

Moreover, during the last 60 days, the Zacks Consensus Estimate for 2013 increased by a penny to $6.57 per share. For 2014, the Zacks Consensus Estimate inched up 0.3% to $6.69 per share over the same time period.

Other Stocks to Consider

Other stocks in the banking sector that are worth a look include Cape Bancorp, Inc. (CBNJ - Snapshot Report) and Banner Corporation (BANR - Snapshot Report). Both these stocks carry a Zacks Rank #1.

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