Capital One Financial Corporation (NYSE: COF) and Consumer Portfolio Services (NASDAQ:CPSS) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitabiliy, risk and analyst recommendations.
Insider & Institutional Ownership
87.8% of Capital One Financial Corporation shares are held by institutional investors. Comparatively, 47.4% of Consumer Portfolio Services shares are held by institutional investors. 1.7% of Capital One Financial Corporation shares are held by insiders. Comparatively, 37.5% of Consumer Portfolio Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This is a breakdown of current ratings for Capital One Financial Corporation and Consumer Portfolio Services, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Capital One Financial Corporation||2||10||10||1||2.43|
|Consumer Portfolio Services||0||1||1||0||2.50|
Capital One Financial Corporation presently has a consensus price target of $93.26, suggesting a potential upside of 8.43%. Consumer Portfolio Services has a consensus price target of $6.00, suggesting a potential upside of 49.25%. Given Consumer Portfolio Services’ stronger consensus rating and higher possible upside, analysts clearly believe Consumer Portfolio Services is more favorable than Capital One Financial Corporation.
Risk & Volatility
Capital One Financial Corporation has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Consumer Portfolio Services has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500.
Valuation and Earnings
This table compares Capital One Financial Corporation and Consumer Portfolio Services’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Capital One Financial Corporation||$19.13 billion||2.18||$3.31 billion||$6.83||12.59|
|Consumer Portfolio Services||$159.47 million||0.58||$19.61 million||$0.85||4.73|
Capital One Financial Corporation has higher revenue and earnings than Consumer Portfolio Services. Consumer Portfolio Services is trading at a lower price-to-earnings ratio than Capital One Financial Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Capital One Financial Corporation and Consumer Portfolio Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Capital One Financial Corporation||13.32%||7.92%||1.09%|
|Consumer Portfolio Services||5.49%||12.90%||0.99%|
Capital One Financial Corporation pays an annual dividend of $1.60 per share and has a dividend yield of 1.9%. Consumer Portfolio Services does not pay a dividend. Capital One Financial Corporation pays out 23.4% of its earnings in the form of a dividend. Consumer Portfolio Services has increased its dividend for 4 consecutive years.
Capital One Financial Corporation beats Consumer Portfolio Services on 11 of the 18 factors compared between the two stocks.
About Capital One Financial Corporation
Capital One Financial Corporation is a diversified financial services holding company. The Company, along with its subsidiaries, offers a range of financial products and services to consumers, small businesses and commercial clients through branches, the Internet and other distribution channels. The Company’s segments include Credit Card, Consumer Banking, Commercial Banking and Other. The Credit Card segment consists of its domestic consumer and small business card lending, and the international card lending businesses in Canada and the United Kingdom. The Consumer Banking segment consists of its branch-based lending and deposit gathering activities for consumers and small businesses, national deposit gathering, national auto lending and consumer home loan lending and servicing activities. The Commercial Banking consists of its lending, deposit gathering and treasury management services to commercial real estate, and commercial and industrial customers.
About Consumer Portfolio Services
Consumer Portfolio Services, Inc. is a specialty finance company. The Company’s business is to purchase and service retail automobile contracts originated primarily by franchised automobile dealers and by select independent dealers in the United States in the sale of new and used automobiles, light trucks and passenger vans. Through its automobile contract purchases, the Company provides indirect financing to the customers of dealers having limited credit histories, low incomes or past credit problems, who it refers to as sub-prime customers. It serves as an alternative source of financing for dealers, facilitating sales to customers. The Company offers approximately eight financing programs to its dealership customers and prices each program according to the relative credit risk. Its financing programs are Bravo, First Time Buyer, Mercury/Delta, Standard, Alpha, Alpha Plus, Super Alpha and Preferred.
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