How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Capital One (
COF Quick Quote COF - Free Report) ten years ago? It may not have been easy to hold on to COF for all that time, but if you did, how much would your investment be worth today? Capital One's Business In-Depth
With that in mind, let's take a look at Capital One's main business drivers.
Headquartered in McLean, VA, Capital One Financial Corporation is primarily focused on consumer and commercial lending as well as deposit origination. Through its banking and non-banking subsidiaries, the company, founded in 1988, provides various financial products and services to consumers, small businesses and commercial clients in the United States.
Capital One’s principal subsidiaries include Capital One Bank (USA), National Association (COBNA) and Capital One, National Association (CONA). The company reports results of its business through the following operating segments:
The Credit Card segment (contributed 61.7% to total net revenues in 2020) includes domestic consumer and small business card lending, domestic national small business lending, national closed end installment lending and the international card lending businesses in Canada and the U.K.
The Commercial Banking segment (10.4%) includes lending, deposit gathering and treasury management services to commercial real estate and middle-market customers. The segment also includes the financial results of a national portfolio of small ticket commercial real estate loans that are in run-off mode. The commercial and industrial customers include companies with annual revenues between $10 million–$1.0 billion.
The Consumer Banking segment (27%) comprises branch-based lending and deposit gathering activities for small businesses and retail customers, national deposit gathering, consumer mortgage lending and servicing activities as well as national automobile lending.
The Other category (0.9%) includes management of corporate investment portfolio and asset/liability management by centralized Corporate Treasury group.
As of Mar 31, 2021, Capital One had total assets worth $425.2 billion, total loans held for investment of $243.1 billion, total deposits of $310.3 billion and shareholders’ equity of $61.2 billion. Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Capital One a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2011 would be worth $3,225.80, or a gain of 222.58%, as of June 4, 2021, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 222.49% and the price of gold went up 16.68% over the same time frame.
Analysts are anticipating more upside for COF.
Shares of Capital One have outperformed the industry so far this year. The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters. Its first-quarter 2021 results were aided by a rise in non-interest income and provision benefits. Robust card and online-banking businesses, and a solid liquidity position are likely to continue aiding Capital One’s profits. As consumers gain confidence in the economic recovery, there is likely to be a gradual rise in the demand for consumer loans, which will support non-interest income growth. Strategic inorganic expansion initiatives will keep supporting the bottom line. However, near-zero interest rates are likely to continue hurting margins and the top line in the near term. Deteriorating credit quality makes us apprehensive. Higher costs will likely hurt profits.
Shares have gained 6.30% over the past four weeks and there have been 10 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.