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 robust revenue growth, increase in net income, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.1%. Since the same quarter one year prior, revenues rose by 35.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Consumer Finance industry. The net income increased by 107.1% when compared to the same quarter one year prior, rising from $407.00 million to $843.00 million.
- Even though the current debt-to-equity ratio is 1.23, it is still below the industry average, suggesting that this level of debt is acceptable within the Consumer Finance industry.
- CAPITAL ONE FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to 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 reported lower earnings of $6.70 versus $7.05 in the prior year. For the next year, the market is expecting a contraction of 5.7% in earnings ($6.32 versus $6.70).
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. Capital One Financial has a market cap of $32.15 billion and is part of the financial sector and financial services industry. The company has a P/E ratio of 8.4, below the S&P 500 P/E ratio of 17.7. Shares are down 5.4% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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