Capital One Financial Corp Stock Buy Recommendation Reiterated (COF)

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 ( TheStreet) -- Capital One Financial (NYSE: COF) 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, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and increase in net income. 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 8.3%. Since the same quarter one year prior, revenues rose by 35.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.97, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 31.85% over the past year, a rise that has exceeded that of the S&P 500 Index. 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.
  • 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 44.9% when compared to the same quarter one year prior, rising from $813.00 million to $1,178.00 million.
  • Net operating cash flow has significantly increased by 220.32% to $4,981.00 million when compared to the same quarter last year. In addition, CAPITAL ONE FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of 77.46%.

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. Capital One Financial has a market cap of $36.24 billion and is part of the financial sector and financial services industry. The company has a P/E ratio of 10.4, below the S&P 500 P/E ratio of 17.7. Shares are up 7.6% year to date as of the close of trading on Thursday.

You can view the full Capital One Financial Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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