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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Capital One (COF) ten years ago? It may not have been easy to hold on to COF for all that time, but if you did, how much would your investment be worth today?
Capital One's Business In-Depth
With that in mind, let's take a look at Capital One's main business drivers.
Headquartered in McLean, VA, Capital One Financial Corporation is primarily focused on consumer and commercial lending as well as deposit origination. Through its banking and non-banking subsidiaries, the company, founded in 1988, provides various financial products and services to consumers, small businesses and commercial clients in the United States.
Capital One’s principal subsidiaries include Capital One Bank (USA), National Association (COBNA) and Capital One, National Association (CONA). The company reports results of its business through the following operating segments:
The Credit Card segment (contributed 61.7% to total net revenues in 2020) includes domestic consumer and small business card lending, domestic national small business lending, national closed end installment lending and the international card lending businesses in Canada and the U.K.
The Commercial Banking segment (10.4%) includes lending, deposit gathering and treasury management services to commercial real estate and middle-market customers. The segment also includes the financial results of a national portfolio of small ticket commercial real estate loans that are in run-off mode. The commercial and industrial customers include companies with annual revenues between $10 million–$1.0 billion.
The Consumer Banking segment (27%) comprises branch-based lending and deposit gathering activities for small businesses and retail customers, national deposit gathering, consumer mortgage lending and servicing activities as well as national automobile lending.
The Other category (0.9%) includes management of corporate investment portfolio and asset/liability management by centralized Corporate Treasury group.
As of Jun 30, 2021, Capital One had total assets worth $423.4 billion, total loans held for investment of $249.6 billion, total deposits of $306.3 billion and shareholders’ equity of $64.6 billion.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Capital One ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in July 2011 would be worth $3,413.99, or a gain of 241.40%, as of July 28, 2021, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 237.31% and gold's return of 7.16% over the same time frame.
Analysts are forecasting more upside for COF too.
Shares of Capital One have outperformed the industry so far this year. Its earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters. Its second-quarter 2021 results reflect improved consumer loan demand, provision benefits and higher expenses. Robust card and online-banking businesses, and a solid balance sheet are likely to keep aiding profits. With consumers gaining confidence in the economic recovery, there has been a gradual rise in the demand for consumer loans, which will support non-interest income growth. Though near-zero interest rates, deteriorating credit quality and higher operating expenses are major near-term concerns and might hurt financials, strategic inorganic expansion initiatives will support bottom-line growth. The company's impressive capital deployment plans will enhance shareholder value.
Over the past four weeks, shares have rallied 5.44%, and there have been 4 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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Capital One Financial Corporation (COF) : Free Stock Analysis Report
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