Latest news with #DiscoverFinancial
Yahoo
2 days ago
- Business
- Yahoo
Jim Cramer Says Capital One is 'Poised to Have Multiple Years of Outstanding Growth'
Capital One Financial Corporation (NYSE:COF) is one of the stocks in Jim Cramer's spotlight. During the episode, Cramer showed quite a bullish sentiment toward the company stock, as he said: 'Whenever the averages are near their all-time highs, even after today's pullback, all sorts of people come out of the woodwork to claim that great stocks have become overvalued, but sometimes these stocks have a lot more room to run. Take Capital One Financial, the bank with a huge credit card business that we own for the Charitable Trust… Now, since we first bought this one for the trust on March 6, we're already up over 28% but we're sticking with it. Why? Because I think it's got a tremendous growth story. It's not done anywhere near here. The recent run is all about Capital One's acquisition of Discover Financial in an all-stock deal valued at $35.3 billion… A smiling face of a customer as they make a deposit at this company's branch. Capital One (NYSE:COF) provides a range of banking services, including credit cards, loans, deposits, and online banking. The company serves individuals, small businesses, and commercial clients through both digital and physical channels. While we acknowledge the potential of COF as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-07-2025
- Business
- Yahoo
Capital One Financial (COF)'s Discover Acquisition Might Have Been Challenged By Biden Admin, Says Jim Cramer
We recently published . Capital One Financial Corporation (NYSE:COF) is one of the stocks Jim Cramer recently discussed. Capital One Financial Corporation (NYSE:COF) is a sizable American bank that scored a major win in 2025 after all regulators cleared the firm's acquisition of Discover Financial. Cramer has discussed the deal several times in 2025. In all his discussions, the CNBC host has remained optimistic about the deal and commented that the new entity can very well take on US payment giants Mastercard and Visa. Capital One Financial Corporation (NYSE:COF)'s shares have gained 22% year-to-date on the back of tailwinds generated by the deal. This time, he commented on whether the former Biden administration would have let the deal go through: 'Now um, we have a Cox deal with Charter. I think that the, no I know at the last minute, the Biden administration would have challenged the Discover-Capital One deal because those are two lower-end credit companies getting together. And they would have I think waited right to the end.' A smiling face of a customer as they make a deposit at this company's branch. Cramer also recently discussed Capital One Financial Corporation (NYSE:COF) in the context of other banking giants: 'It also bodes well for the banks, any banks, including Bank of America, Wells Fargo, and my favorite right now is Capital One. Now that Capital One has merged with Discover, its stock has the potential to keep climbing because it's put together a credit card powerhouse. And I know it's up a lot, but it can go higher.' While we acknowledge the potential of COF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey.
Globe and Mail
07-07-2025
- Business
- Globe and Mail
Does Capital One's Lower SCB Reflect Robust Capital Discipline?
Last week, Capital One COF announced that its preliminary Stress Capital Buffer (SCB) has been set at 4.5% by the Federal Reserve. This will be effective from Oct. 1, 2025, through Sept. 30, 2026. The requirement, determined through the 2025 Comprehensive Capital Analysis and Review (CCAR), is lower than the previously disclosed SCB of 5.5% in effect through Sept. 30, 2025. This preliminary SCB is pending final confirmation by the Fed, which is expected to be announced by Aug. 31, 2025. The development strengthens Capital One's financial position by increasing its capital flexibility. With less capital constrained by regulatory buffers, the company can allocate resources more efficiently toward strategic priorities, such as growth initiatives like acquisitions, product innovation and potential shareholder returns, including dividends and share repurchases. This optimized capital deployment supports higher returns on equity and bolsters long-term profitability. In April 2025, the Fed issued a notice of proposed rulemaking to revise how the SCB is calculated. Under the proposal, SCB requirements would be based on the average of stress test results over two consecutive years, rather than a single year. As a testament to its financial strength, in May, Capital One acquired Discover Financial in an all-stock deal valued at $35.3 billion, reshaping the credit card industry landscape, creating a behemoth and unlocking substantial value for shareholders. The company is now well-placed to capture a bigger share of spending on cards. Also, since July 2021, Capital One has maintained its quarterly dividend of 60 cents per share, with a payout ratio currently at 16% of earnings. Further, it has a share repurchase program in place. As of March 31, 2025, nearly $3.88 billion worth of repurchase authorization remained. How Capital One's Peers Fared in Terms of SCB A total of 22 financial institutions, including Capital One, were under this year's CCAR. Similar to COF, JPMorgan JPM noted that under the current SCB framework, the Fed has set its preliminary SCB requirement at 2.5%. This is lower than JPMorgan's previous SCB of 3.3%. Post-clearing the 2025 stress test, the company announced enhanced capital plans. JPMorgan intends to hike its quarterly dividend by 7.1% to $1.50 per share and authorized a share repurchase program worth $50 billion, which became effective as of July 1. Further, under CCAR, this year, Goldman 's GS SCB set by the central bank is lower than the previous year. The company's SCB will be 3.4% from Oct. 1, 2025, through Sept. 30, 2026. At present, Goldman's SCB is 6.1%. Like JPM, Goldman cleared this year's stress test and announced a raise in its quarterly dividend. The company plans to increase its dividend by 33.3% to $4 per share. Capital One's Price Performance and Zacks Rank This year, shares of Capital One have gained 23.8%, outperforming the industry 's rally of 21.9%. COF currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Only $1 to See All Zacks' Buys and Sells We're not kidding. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone. See Stocks Now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report Capital One Financial Corporation (COF): Free Stock Analysis Report
Yahoo
27-06-2025
- Business
- Yahoo
Capital One Financial Corporation (COF): A Bull Case Theory
We came across a bullish thesis on Capital One Financial Corporation on Pacific Northwest Edge's Substack by David. In this article, we will summarize the bull's thesis on COF. Capital One Financial Corporation's share was trading at $206.36 as of June 24th. COF's trailing and forward P/E ratios were 17.34 and 13.48, respectively, according to Yahoo Finance. A technician inserting a credit card into a point-of-sale machine for identity authentication. Capital One's acquisition of Discover Financial Services marks a transformative moment in the credit card and payments landscape, positioning the company as a direct rival to American Express in a way never seen before. While Capital One was already a dominant issuer in the credit card space—earning 86% of its Q1 2025 profits from credit cards—the acquisition grants it ownership of a full payment network for the first time. This vertically integrated model mirrors that of American Express, which has long benefited from higher interchange fees due to its dual role as both network and issuer. Discover, although more broadly accepted than AmEx, lacked premium appeal. Capital One now controls both models and is positioned to scale aggressively. This move gives Capital One an economic moat that's nearly impossible to replicate due to the complexity of establishing a reliable and widely accepted payments network. CEO Richard Fairbanks emphasized their strategy to grow the Discover network globally, slowly increasing international acceptance before ramping up brand investment. With the infrastructure in place, Capital One can now issue co-branded rewards cards, shift more volume onto its own network, and potentially serve as a network provider for other institutions. Despite issuing new stock to fund the acquisition, Capital One's strong history of buybacks and high free cash flow remains intact. The moat created by owning a network, combined with network effects and switching costs, significantly enhances Capital One's competitive position. In short, this acquisition elevates Capital One from a narrow-moat issuer to a formidable, wide-moat competitor with room to take share and grow earnings. Previously, we covered a on Capital One Financial Corporation by Stock Analysis Compilation in December 2024, which highlighted the long-term earnings upside from cost synergies via Discover's network. The company's stock price has appreciated by approximately 17% since our coverage. This is because the thesis began to play out. The thesis still stands as integration remains underway. David shares a similar view but emphasizes Capital One's emerging network moat and global ambitions. Capital One Financial Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 93 hedge fund portfolios held COF at the end of the first quarter, which was 89 in the previous quarter. While we acknowledge the risk and potential of COF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
27-06-2025
- Business
- Yahoo
Capital One (COF) Sees Discover Acquisition as Aligned with its Core Vision
Capital One Financial Corporation (NYSE:COF) is one of the 10 cheap Jim Cramer stocks to invest in. During the Morgan Stanley U.S. Financials Conference in June, the company's CEO, Richard Fairbank, while marking the completion of the largest banking transaction since the global financial crisis, remarked that the company is not actively pursuing a strategy of acquiring numerous banks. He noted that most banks tend to expand by purchasing others and acknowledged that Capital One Corporation (NYSE:COF) did go through a period when it acquired banks, but the objective then was to shift its funding structure away from capital markets and toward FDIC-insured deposits. Fairbank stated that the phase has concluded. He described the Discover acquisition as a distinct opportunity that aligns more closely with what he considers an organic path of growth. According to TipRanks, on June 5, BTIG analyst Vincent Caintic noted that Capital One (NYSE:COF) may improve Discover's acceptance rate by employing similar tactics that American Express previously used to grow its network. Caintic maintained a Buy rating with a $264 price target, and one of the main factors of being bullish on the stock is its potential for broader merchant acceptance. A smiling face of a customer as they make a deposit at this company's branch. Furthermore, on June 5, discussing the company, Cramer said: 'You know what, I'm hoping that COF, Capital One, which just bought Discover Financial, that it could enter the 52-week hallowed ground. It's cheap. It'll have a gigantic buyback come July… COF, I feel very lonely, but I won't come July.' Capital One (NYSE:COF) is a financial services holding company that provides credit cards, loans, and banking services. Additionally, the company offers advisory services and capital markets solutions. While we acknowledge the potential of COF as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None.
