Capital One Financial (NYSE:COF) vs. NBT Bancorp (NYSE:NBTB) Critical Comparison

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

Insider & Institutional Ownership

88.3% of Capital One Financial shares are held by institutional investors. Comparatively, 54.1% of NBT Bancorp shares are held by institutional investors. 1.4% of Capital One Financial shares are held by insiders. Comparatively, 3.3% of NBT Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Capital One Financial pays an annual dividend of $1.60 per share and has a dividend yield of 1.9%. NBT Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 2.9%. Capital One Financial pays out 14.7% of its earnings in the form of a dividend. NBT Bancorp pays out 40.6% 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. NBT Bancorp has increased its dividend for 6 consecutive years. NBT Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Capital One Financial and NBT Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Capital One Financial $32.38 billion 1.25 $6.02 billion $10.88 7.88
NBT Bancorp $469.02 million 3.35 $112.57 million $2.56 14.02

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

Volatility and Risk

Capital One Financial has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, NBT Bancorp has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Capital One Financial and NBT Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capital One Financial 1 7 11 0 2.53
NBT Bancorp 0 2 0 0 2.00

Capital One Financial presently has a consensus price target of $105.24, suggesting a potential upside of 22.75%. NBT Bancorp has a consensus price target of $38.00, suggesting a potential upside of 5.91%. Given Capital One Financial’s stronger consensus rating and higher probable upside, equities analysts clearly believe Capital One Financial is more favorable than NBT Bancorp.

Profitability

This table compares Capital One Financial and NBT 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%
NBT Bancorp 24.08% 11.47% 1.23%

Summary

Capital One Financial beats NBT Bancorp on 10 of the 17 factors compared between the two stocks.

Capital One Financial Company Profile

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 Caf├ęs, 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.

NBT Bancorp Company Profile

NBT Bancorp Inc., a financial holding company, provides commercial banking, retail banking, and wealth management services. Its deposit products include demand deposit, savings, negotiable order of withdrawal, money market deposit, and certificate of deposit accounts. The company's loan portfolio comprises commercial and industrial, commercial real estate, agricultural, and commercial construction loans; indirect and direct consumer, home equity, direct loans, mortgages, business banking loans, and commercial loans; and residential real estate loans, as well as development loans. It also provides trust and investment services; financial planning and life insurance services; and retirement plan consulting and recordkeeping services. In addition, the company offers insurance products comprising personal property and casualty, business liability, and commercial insurance, as well as other products and services through 24-hour online, mobile, and telephone channels that enable customers to check balances, make deposits, transfer funds, pay bills, access statements, apply for loans, and access various other products and services. As of December 31, 2018, it had 151 banking locations and 182 ATMs in Pennsylvania, Vermont, Massachusetts, New Hampshire, and Maine. NBT Bancorp Inc. was founded in 1856 and is headquartered in Norwich, New York.

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