Capital One Financial (NYSE: COF) and Triangle Capital (NYSE:TCAP) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.
Insider and Institutional Ownership
90.1% of Capital One Financial shares are held by institutional investors. Comparatively, 45.1% of Triangle Capital shares are held by institutional investors. 1.7% of Capital One Financial shares are held by insiders. Comparatively, 3.5% of Triangle Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Capital One Financial has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Triangle Capital has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.
Capital One Financial pays an annual dividend of $1.60 per share and has a dividend yield of 1.7%. Triangle Capital pays an annual dividend of $1.20 per share and has a dividend yield of 10.3%. Capital One Financial pays out 20.5% of its earnings in the form of a dividend. Triangle Capital pays out 77.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Capital One Financial and Triangle Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Capital One Financial||6.89%||8.36%||1.15%|
This is a breakdown of current ratings and price targets for Capital One Financial and Triangle Capital, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Capital One Financial||1||11||9||0||2.38|
Capital One Financial currently has a consensus price target of $106.80, suggesting a potential upside of 12.75%. Triangle Capital has a consensus price target of $15.50, suggesting a potential upside of 33.62%. Given Triangle Capital’s higher probable upside, analysts clearly believe Triangle Capital is more favorable than Capital One Financial.
Earnings and Valuation
This table compares Capital One Financial and Triangle Capital’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Capital One Financial||$30.00 billion||1.54||$1.98 billion||$7.79||12.16|
|Triangle Capital||$123.00 million||4.53||-$28.65 million||$1.55||7.48|
Capital One Financial has higher revenue and earnings than Triangle Capital. Triangle Capital 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.
Capital One Financial beats Triangle Capital on 10 of the 16 factors compared between the two stocks.
About Capital One Financial
Capital One Financial Corporation operates as the bank holding company for the Capital One Bank (USA), National Association; and Capital One, National Association, which provides various financial products and services in the United States, the United Kingdom, and Canada. It operates through three segments: Credit Card, Consumer Banking, and Commercial Banking. The company offers non-interest-bearing and interest-bearing deposits, such as checking accounts, money market deposit accounts, negotiable order of withdrawals, savings deposits, and time deposits. It also provides credit card loans; auto, home, and retail banking loans; and commercial and multifamily real estate, commercial and industrial, and small-ticket commercial real estate loans. In addition, the company offers credit and debit card products; online direct banking services; and treasury management and depository services. It serves consumers, small businesses, and commercial clients through the Internet and mobile banking, as well as through ATMs and branches located in New York, Louisiana, Texas, Maryland, Virginia, New Jersey, and the District of Columbia. Capital One Financial Corporation was founded in 1988 and is headquartered in McLean, Virginia.
About Triangle Capital
Triangle Capital Corporation is a business development company specializing in private equity and mezzanine investments. It focuses on leveraged buyouts, management buyouts, ESOPs, change of control transactions, acquisition financings, growth financing, and recapitalizations in lower middle market, mature, and later stage companies. The firm prefers to make investments in many business sectors including manufacturing, distribution, transportation, energy, communications, health services, restaurants, media, and others. It primarily invests in companies located throughout the United States, with an emphasis on the Southeast and Midatlantic. The firm makes equity investments between $1 million and $25 million and debt investments between $5 million and $30 million per transaction, in companies having annual revenues between $20 million and $200 million and EBITDA between $3 million and $35 million and can also co-invest. It typically makes investments between $5 million and $35 million. It primarily invests in senior subordinated debt securities secured by second lien security interests in portfolio company assets, coupled with equity interests. The firm also invests in senior debt securities secured by first lien security interests in portfolio companies. Triangle Capital Corporation was incorporated on October 10, 2006 and is based in Raleigh, North Carolina.
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