Should Value Investors Buy Capital One (COF) Shares?

HAt Zacks, we focus on our proven ranking system, which emphasizes earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, which is why we constantly review the latest trends in value, growth, and momentum to find strong businesses for our readers.

Given these trends, value investing is clearly one of the most preferred ways to find solid stocks in any type of market. Value investors use a variety of methods, including proven valuation metrics, to find these stocks.

In addition to the Zacks Rankings, investors looking for stocks with specific characteristics can use our Style Scores system. Of course, value investors will be more interested in the “Value” category of the system. Stocks with “A” ratings for value and high Zacks ranks are among the most profitable stocks available at any given time.

Capital One (COF) is a stock that many investors are watching right now. COF currently holds a Zacks rank of # 2 (Buy) and a value rating of A.

Investors should also recognize that COF has a P / N ratio of 1.12. The P / B ratio pits the market value of a stock against its book value, which is defined as total assets minus total liabilities. COF’s current P / B looks attractive compared to its industry’s average P / B of 1.13. Over the past year, the P / N of COF has reached 1.24 and as low as 0.56, with a median of 0.99.

Finally, investors should note that the COF has a P / CF ratio of 4.81. This data point takes into account a company’s operating cash flow and is frequently used to find undervalued companies when considering their strong cash flow outlook. This stock’s P / CF looks attractive compared to its industry’s average P / CF of 5.48. Over the past year, the P / CF of COF has reached 9.82 and as low as 4.52, with a median of 6.88.

These are just a few of the numbers reflected in Capital One’s big Value rating. Still, they help show that the title is probably undervalued right now. Add that to the strength of its earnings outlook, and we can clearly see that COF is an impressive value stock right now.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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