Back to top

Analyst Blog

On Jul 11, 2013, we upgraded our recommendation on Capital One Financial Corp. (COF - Analyst Report) to Outperform from Neutral based on its encouraging capital deployment activities. Alongside, the company has been growing both organically and inorganically.

Why Outperform?

Capital One has always been an attractive pick for yield-seeking investors. Recently, in Jul 2013, the company announced a share repurchase authorization worth $1.0 billion. Earlier, in May 2013, the company announced a 500% hike in its common stock dividend. All these factors have boosted shareholders’ confidence.

Capital One has a geographically diversified loan portfolio due to its series of acquisitions through which it entered into new geographic markets. This in turn, has reduced the operational risk for the company.

Moreover, Capital One has been witnessing steady growth in deposits. Total customer deposits have also been continuously increasing. These factors evidently reflect Capital One’s strength with respect to its credit card businesses.

For Capital One, the Zacks Consensus Estimate for 2013 remained unchanged at $6.56 per share over the last 60 days. For 2014, the Zacks Consensus Estimate advanced 0.4% to $6.70 per share over the same time frame.

The Zacks Consensus Estimate for the second quarter is pegged at $1.71 per share. The earnings ESP (Read: Zacks Earnings ESP: A Better Method) for Capital One is +2.34% for the second quarter. This, along with its Zacks Rank #2 (Buy) makes it likely for the company to report a positive earnings surprise.

Other Stocks to Consider

Other stocks that are worth considering include Discover Financial Services (DFS - Analyst Report), Regional Management Corp. (RM - Snapshot Report) and World Acceptance Corp. (WRLD - Snapshot Report). All the stocks carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 2.99 +2.75%
THE PANTRY… PTRY 20.99 +1.94%
CHINA BIOLO… CBPO 46.88 +1.77%
PIPER JAFFR… PJC 54.50 +1.62%
NN INC NNBR 28.43 +1.46%