Head to Head Analysis: Capital One Financial (NYSE:COF) and X Financial (NYSE:XYF)

Capital One Financial (NYSE:COF) and X Financial (NYSE:XYF) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Valuation & Earnings

This table compares Capital One Financial and X Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital One Financial	$69.25 billion	1.83	$2.45 billion	$16.16	12.78
X Financial	$1.09 billion	0.18	$209.43 million	$1.96	2.58

Capital One Financial has higher revenue and earnings than X Financial. X Financial is trading at a lower price-to-earnings ratio than Capital One Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Capital One Financial and X Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital One Financial	0	3	21	0	2.88
X Financial	0	1	0	0	2.00

Capital One Financial presently has a consensus price target of $258.91, indicating a potential upside of 25.33%. Given Capital One Financial’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Capital One Financial is more favorable than X Financial.

Volatility and Risk

Capital One Financial has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, X Financial has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500.

Institutional and Insider Ownership

89.8% of Capital One Financial shares are held by institutional investors. Comparatively, 1.1% of X Financial shares are held by institutional investors. 0.8% of Capital One Financial shares are held by company insiders. Comparatively, 31.6% of X Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Capital One Financial pays an annual dividend of $3.20 per share and has a dividend yield of 1.5%. X Financial pays an annual dividend of $0.54 per share and has a dividend yield of 10.7%. Capital One Financial pays out 19.8% of its earnings in the form of a dividend. X Financial pays out 27.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares Capital One Financial and X Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital One Financial	13.37%	11.28%	1.90%
X Financial	9.94%	9.14%	5.20%

Summary

Capital One Financial beats X Financial on 13 of the 16 factors compared between the two stocks.

About Capital One Financial

Capital One Financial Corporation operates as the financial services holding company for the Capital One, National Association, which engages in the provision of various financial products and services in the United States, Canada, and the United Kingdom. It operates through three segments: Credit Card, Consumer Banking, and Commercial Banking. The company accepts checking accounts, money market deposits, negotiable order of withdrawals, savings deposits, and time deposits. Its loan products include credit card loans; auto and retail banking loans; and commercial and multifamily real estate, and commercial and industrial loans. The company also offers credit and debit card products; online direct banking services; and provides advisory, capital markets, treasury management, and depository services. It serves consumers, small businesses, and commercial clients through digital channels, branches, cafés, and other distribution channels located in New York, Louisiana, Texas, Maryland, Virginia, New Jersey, and California. The company was founded in 1988 and is headquartered in McLean, Virginia.

About X Financial

X Financial provides personal finance services in the People’s Republic of China. The company offers services as an online marketplace connecting borrowers and investors or institutional funding partners. Its loan products include Xiaoying credit loan, which consists of Xiaoying card loan; and Xiaoying preferred loan to small business owners. The company also offers Xiaoying housing loan, a home equity loan product for property owners; investment products through Xiaoying wealth management platform, such as funds, money market, and insurance products; and loan facilitation services to other platforms. In addition, it engages in the technology development, service, and sale of products; and provision of guarantee and consulting services. The company was incorporated in 2014 and is headquartered in Shenzhen, the People’s Republic of China.