Capital One: Washington Obstinacy Loser

Capital One's shares have now risen 39% year-to-date, following a flat return during 2011.

The shares trade for 1.5 times tangible book value, according to Thomson Reuters Bank Insight, and for 8.3 times the consensus 2013 EPS estimate of $7.03, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $7.39.

FBR Capital Markets analyst Paul Miller on Wednesday included Capital One among his list of "five top stocks in the financial services/real estate sector" for 2013, because of its "compelling valuation" with a price target of $72, or 10 times the analyst's 2013 EPS estimate of $7.15, and 1.1 times his year-end 2013 tangible book value estimate.

Miller also cited Capital One's "expected resumption of the dividend, and increased earnings power," following its great transition during 2012, with the acquisition of ING Direct (USA) providing plenty of deposit liquidity in advance of the company's purchase of HSBC's (HBC) U.S. credit card portfolio.

"We believe that the issues restraining the stock in the near term (seasonal weakness in credit card asset quality, concerns regarding the amount of planned asset runoff, and elevated non-interest expense) will be positively resolved in 1H13," he said.

COF data by YCharts

Interested in more on Capital One? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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