Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.2%. Since the same quarter one year prior, revenues rose by 25.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.96, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- Compared to its closing price of one year ago, COF's share price has jumped by 36.84%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, COF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CAPITAL ONE FINANCIAL CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CAPITAL ONE FINANCIAL CORP increased its bottom line by earning $7.05 versus $6.68 in the prior year. For the next year, the market is expecting a contraction of 13.5% in earnings ($6.10 versus $7.05).
Capital One Financial Corporation operates as the bank holding company for the Capital One Bank (USA), National Association (COBNA), and Capital One, National Association (CONA), which provide various financial products and services in the United States, the United Kingdom, and Canada. The company has a P/E ratio of 10.4, below the average financial services industry P/E ratio of 10.6 and below the S&P 500 P/E ratio of 17.7. Capital One Financial has a market cap of $33.72 billion and is part of the
industry. Shares are up 35.4% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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