1. Capital One Financial


Shares of Capital One ( COF) Financial of McLean, Va., closed at $62.88 Monday, trading for 1.6 times tangible book value, and for nine times the consensus 2013 EPS estimate of $7.02. The consensus 2014 EPS estimate is $7.38.

The shares returned 38% during 2012, following a flat return in 2011.

Capital One will report its fourth-quarter results after the market closes on Jan. 17, with the consensus among analysts being a profit of $1.62 a share, compared to EPS of $2.01 the previous quarter and 88 cents a year earlier.

The third quarter was Capital One's first "clean quarter" of 2012, with the company reporting a strong return on average tangible common equity of 21.48%. The first and second quarters of 2012 were affected by numerous one-time items springing form Capital One's two transformative mergers. The company in February acquired ING Direct (USA), followed by a $1.25 billion common equity raise in March. Then in May, Capital One purchased HSBC's ( HBC) U.S. credit card portfolio for $2.5 billion.

The ING deal included about $80 billion in deposits gathered over the Internet, along with $41 billion in loans, providing more than sufficient liquidity for the $28.2 billion in credit card loans acquired from HSBC.

FBR analyst Paul Miller on Dec. 19 included Capital One among his list of "stocks to own for 2013," with a price target of $72, saying the company is "one of our favorite names due to its compelling valuation ($72 target = 10x our FY13 EPS estimate and 1.1x book value), expected resumption of the dividend, and increased earnings power."

Miller estimates that Capital One will report fourth-quarter EPS of $1.71, and estimates the company will earn $7.15 a share in 2013, with EPS rising to $7.25 in 2014.

COF Chart COF data by YCharts

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

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

>Contact by Email.

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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