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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Capital One Financial Corporation (XNYS:COF) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
COF
Name:
CAPITAL ONE FINANCIAL CORPORATION (XNYS:COF)
Sector:
- 79000.00K
Industry:
Credit Services
CEO:
Mr. Richard Fairbank
Total Employees:
53,600
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -114.74% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CAPITAL ONE FINANCIAL CORPORATION(COF) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
104.22
One Month Price Target:
$105.05
Six Month Price Target :
$109.21
Likely Price in One Year's Time:
Ticker:
$114.21
Likely Trading Range Today Under (Normal Volatility)
$103.7
Price Upper limit ($) :
$104.86
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$97.3
This week:
$88.74
This month :
$73.26
Other Primary facts
Market Cap:
39.23B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
383.80M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.75%
-23.87%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$136.34
$121.61
$72.10
$86.83
Medium risk (<10%) entry points
Buy Call
Sell Call
$116.81
Buy Put:
Sell Put:
$113.66
$91.59
$94.78
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
COF
Sharpe Ratio:
1.50%
Comparison:
COF, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -19.52% lower than the industry
& is -34.36% lower than the market/S&P 500 average
Average Returns/Yield of
COF
Daily returns:
0.06%
Weekly returns:
0.29%
Monthly returns:
1.15%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -27.41% below industry average
Classification:
COF, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.13
Statistical test of Returns:
COF has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.26%
Weekly Volatility:
7.29%
Monthly Volatility:
14.59%
Yearly Volatility:
50.54%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.30%
Volatility in last five trading days has been -90.81% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.64%
Weekly VaR:
-14.85%
Monthly VaR:
-29.71%
How Much Can the price of
COF
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-26%
Worst case (decline):
>85%
This translates to price declining to:
$77.53
This translates to price declining to:
$15.63
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
COF is a 109.67% riskier investment compared to the market/S&P 500 & is 79.62% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -1.14% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
COF
Beta in relation to market/S&P 500--1.43
Expected beta in 1 year's time:
0.878
Expected beta in 3 year's time:
1.241
Unlevered (debt free) Beta:
0.877
Beta in relation to Nasdaq (XNAS):
1.03
Beta in relation to all global stocks::
1.115
Beta Comparison & Analysis
Beta of competitors/peers::
0.965
Beta is 47.74% higher than peers
Average Industry Beta:
1.332
Beta is 7.08% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
17.90%
Sustainable growth rate is -46.93% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.009
Alpha is -86.48% below industry average alpha yield
Alpha is 58% compared to market & is healthy
Analysis of Cost of Capital of
COF
Equity cost of capital:
0.129
Equity cost of capital is 5.26% above industry mean WACC
Unlevered (without debt) cost of capital:
7.95%
Before-tax cost of debt:
3.45%
After-tax cost of debt:
2.73%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.73%
WACC is 46.11% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$82.06
Revenue growth rate per share of (3Y):
0.71
Annual revenue growth rate is -83.41% below industry average
EPS:
$25.44
Expected Annual growth rate of EPS (3Y):
34.40%
Expected future EPS growth rate is 37.29% higher than the Credit Services industry
Free cash flow (FCF) per share:
$25.60
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is -520.06% lower than the industry
Debt per share
$116.63
EBITDA per share
$48.83
Valuation Analysis Today of
COF
P/E Ratio:
4.57
P/E Ratio of Competitors/Peers:
27.35
P/E ratio is -83.27% lower than main peers & is -62.31% lower than the industry
Stock price/value with industry average P/E ratio: $308.78
COF is -66.25% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.27
Price to sales ratio is -75.57% below the industry mean
P/B (Price to book value ratio):
0.71
Price to free cash flow: 4.07
Price to free cash flow ratio is -85.43% lower than the industry
Net income growth rate (3Y):
133.97%
Net income growth rate is 729.44% higher than the average industry net income growth rate
Dividend Analysis
-
Dividend yeild: 2.88%
Previous Dividend: $0.60
Previous adjusted dividend: $0.60
Previous Dividend: $3.00
Expected next dividend best case: $0.85
Expected next dividend worst case: $0.35
Average dividend payment (long-term): $0.47
Average dividend increase/decrease (growth rate) % per period: 37.50%
Expected next dividend payment date: 25/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 08/03/2022
Previous dividend payment date: 27/05/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 05/05/2022
Dividend History:
2022-05-13--$0.60
2021-11-12--$0.60
2021-05-14--$0.40
2022-02-11--$0.60
2021-08-06--$1.20
2021-02-16--$0.40
Dividend growth rate is -491.95% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
79.45%
Net debt to equity ratio:
31.88%
Debt to assets ratio:
10.31%
Net debt to assets ratio:
4.14%
Debt-to-asset ratio is -86.78% below industry average
Ability to repay debt:
Interest coverage ratio:
12.12
Interest coverage ratio is 23.41% more than industry average
Looking forward:
Debt growth rate:
4.26%
Annual debt growth is -91% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.714
Statistical significance of correlation:
COF has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is 27.34% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.031
Covariance of price movement with the market:
0.06
Kurtosis
8.777
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.228
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
COF
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
0.02%
Operating profit margin is -99.94% lower than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
21.21%
Effective tax rate is -2.04% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
20.35%
Return on equity (ROE) is -51.99% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.64%
Return on assets (ROA) is -56.41% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 5.9 years
Stock based compensation to net income ratio:
0.93%
In-depth Efficiency Analysis
Revenue generated per employee:
587.6K
Each employee generates -19% less revenue than industry average revenue per employee
EBITDA generated per employee:
349.7K
Each employee generates -17% less EBITDA than industry average revenue per employee
Profit generated per employee:
214.0K
Each employee generates -12% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 1.5K
Each employee generates -103% less free cash flow than industry average revenue per employee
Assets/Capital per employee
2.0M
Each employee generates -103% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
COF
UBS
THE PROGRESSIVE CORPORATION (XNYS:PGR)
MOODY'S CORPORATION (XNYS:MCO)
Banco Santander SA (XNYS:SAN)
BMO
WESTPAC BANKING CORPORATION (XNYS:WBK)
INTERCONTINENTAL EXCHANGE, INC. (XNYS:ICE)
METLIFE, INC. (XNYS:MET)
ICICI BANK LIMITED (XNYS:IBN)
Current Analyst Ratings
Strong buy�17%
Buy�38%
Hold�38%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
31.50B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
8.17B
-
7.60B
10.89B
3.29B
689.00M
3.63B
26.29B
1.55B
2.64B
18.74B
5.65M
11.47B
14.56B
3.09B
11.47B
Statement of Cash Flow
Date:
Period:
839.00M
Differed Income Tax :
187.00M
Stock Based Compensation :
107.00M
Change in Working Capital :
- 3615000.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
- 79000.00K
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
26.80B
89.08B
115.88B
1.48B
-
- 89076000.00K
28.28B
4.24B
14.78B
-
89.08B
-
-
108.10B
514.01B
434.20B
261.00M
-
-
-
-
-
44.76B
-
44.76B
422.61B
377.85B
7.00M
53.10B
- 4093000.0K
7.33B
March 31, 2022 at 6:00:00 AM
-
56.35B
434.20B
178.15B
44.76B
18.0B
-
1.77B
1.77B
-
-
-
-
-
-
-
-
-
-
- 79000.00K
-
- 79000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
COF
2023
2024
2025
2026
2027
$114.78
$377.29
$413.45
$453.08
$496.51