Narrow-moat-rated Capital One reported decent first-quarter earnings that were largely in line with our expectations. Net revenue increased 6% from last year to $9.4 billion, while diluted earnings per share increased 35% to $3.13. These results translate to a return on tangible equity of 12.7%. As we incorporate these results, we do not expect to change our $158 per share fair value estimate.
Capital One's credit card portfolio is enjoying rapid growth, providing a boost to the company's net interest margins and revenue growth.
Credit card reward spending continues to rise industrywide, and competition for credit card holders remains intense. This will likely lead to higher spending for Capital One and could threaten returns on its credit cards.
|
Metric
|
COF
|
SYF
|
DFS
|
|---|---|---|---|
Price/Earnings (Normalized) | 11.68 | 8.92 | 11.35 |
Price/Book Value | 0.96 | 1.28 | 2.34 |
Price/Sales | 1.52 | 1.22 | 1.96 |
Price/Cash Flow | 3.07 | 2.01 | 3.82 |
|
Metric
|
COF
|
SYF
|
DFS
|
|---|---|---|---|
Quick Ratio | — | — | — |
Current Ratio | — | — | — |
Interest Coverage | — | — | — |
|
Metric
|
COF
|
SYF
|
DFS
|
|---|---|---|---|
Return on Assets (Normalized) | 1.02% | 2.61% | 2.12% |
Return on Equity (Normalized) | 8.78% | 22.66% | 22.27% |
Return on Invested Capital (Normalized) | — | — | — |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
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DFS
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SYF
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ALLY
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SOFI
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WU
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