Capital One Financial (NYSE:COF) and Pacific Mercantile Bancorp (NASDAQ:PMBC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.
Earnings and Valuation
This table compares Capital One Financial and Pacific Mercantile Bancorp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Capital One Financial||$32.38 billion||1.26||$6.02 billion||$10.88||7.96|
|Pacific Mercantile Bancorp||$67.18 million||2.42||$27.34 million||N/A||N/A|
Risk & Volatility
Capital One Financial has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Pacific Mercantile Bancorp has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.
This is a summary of recent ratings and price targets for Capital One Financial and Pacific Mercantile Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Capital One Financial||1||7||12||0||2.55|
|Pacific Mercantile Bancorp||0||1||0||0||2.00|
Capital One Financial currently has a consensus price target of $105.72, indicating a potential upside of 22.05%. Pacific Mercantile Bancorp has a consensus price target of $9.00, indicating a potential upside of 22.12%. Given Pacific Mercantile Bancorp’s higher probable upside, analysts clearly believe Pacific Mercantile Bancorp is more favorable than Capital One Financial.
Institutional and Insider Ownership
88.4% of Capital One Financial shares are held by institutional investors. Comparatively, 67.7% of Pacific Mercantile Bancorp shares are held by institutional investors. 1.4% of Capital One Financial shares are held by insiders. Comparatively, 12.3% of Pacific Mercantile Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Capital One Financial and Pacific Mercantile Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Capital One Financial||17.50%||10.68%||1.52%|
|Pacific Mercantile Bancorp||17.07%||9.02%||0.88%|
Capital One Financial pays an annual dividend of $1.60 per share and has a dividend yield of 1.8%. Pacific Mercantile Bancorp does not pay a dividend. Capital One Financial pays out 14.7% of its earnings in the form of a dividend.
Capital One Financial beats Pacific Mercantile Bancorp on 10 of the 15 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 Cafés, 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 Pacific Mercantile Bancorp
Pacific Mercantile Bancorp operates as the holding company for Pacific Mercantile Bank that provides a range of commercial banking products and services to small and medium-size businesses, professional firms, and individuals in Southern California, the United States. The company's deposit products include checking accounts, interest-bearing term deposit accounts, savings and money market deposits, and time deposits. It also offers various loan products, such as commercial loans and credit lines, accounts receivable and inventory financing, small business administration guaranteed business loans, owner-occupied commercial real estate loans, working capital lines of credit and asset based lending, growth capital loans, equipment financing, letters of credit, and corporate credit cards. In addition, the company provides cash and treasury management solutions, automated clearinghouse payment and wire solutions, fraud protection services, remote deposit capture services, courier services, and online banking services; and letters of credit and import/export financing services. As of March 6, 2019, it operated seven locations in Orange, Los Angeles, San Diego, and San Bernardino counties, Southern California. The company was founded in 1998 and is based in Costa Mesa, California.
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