Capital One Financial Corporation (NYSE: COF) and Consumer Portfolio Services (NASDAQ:CPSS) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitabiliy, dividends, analyst recommendations, risk, institutional ownership, earnings and valuation.
Insider and Institutional Ownership
88.4% of Capital One Financial Corporation shares are held by institutional investors. Comparatively, 47.5% of Consumer Portfolio Services shares are held by institutional investors. 1.7% of Capital One Financial Corporation shares are held by company insiders. Comparatively, 37.5% of Consumer Portfolio Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Profitability
This table compares Capital One Financial Corporation and Consumer Portfolio Services’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Capital One Financial Corporation | 13.32% | 7.97% | 1.09% |
| Consumer Portfolio Services | 6.19% | 14.62% | 1.11% |
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Capital One Financial Corporation and Consumer Portfolio Services, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Capital One Financial Corporation | 2 | 10 | 10 | 1 | 2.43 |
| Consumer Portfolio Services | 0 | 1 | 1 | 0 | 2.50 |
Capital One Financial Corporation presently has a consensus target price of $93.26, indicating a potential upside of 6.05%. Consumer Portfolio Services has a consensus target price of $6.00, indicating a potential upside of 28.48%. Given Consumer Portfolio Services’ stronger consensus rating and higher probable upside, analysts plainly believe Consumer Portfolio Services is more favorable than Capital One Financial Corporation.
Earnings and Valuation
This table compares Capital One Financial Corporation and Consumer Portfolio Services’ revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Capital One Financial Corporation | $19.13 billion | 2.22 | $3.31 billion | $6.83 | 12.88 |
| Consumer Portfolio Services | $162.02 million | 0.67 | $21.52 million | $0.93 | 5.02 |
Capital One Financial Corporation has higher revenue and earnings than Consumer Portfolio Services. Consumer Portfolio Services is trading at a lower price-to-earnings ratio than Capital One Financial Corporation, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Capital One Financial Corporation has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Consumer Portfolio Services has a beta of 1.72, suggesting that its stock price is 72% more volatile than the S&P 500.
Dividends
Capital One Financial Corporation pays an annual dividend of $1.60 per share and has a dividend yield of 1.8%. Consumer Portfolio Services does not pay a dividend. Capital One Financial Corporation pays out 23.4% of its earnings in the form of a dividend. Consumer Portfolio Services has increased its dividend for 4 consecutive years.
Summary
Capital One Financial Corporation beats Consumer Portfolio Services on 10 of the 18 factors compared between the two stocks.
About Capital One Financial Corporation
Capital One Financial Corporation is a diversified financial services holding company. The Company, along with its subsidiaries, offers a range of financial products and services to consumers, small businesses and commercial clients through branches, the Internet and other distribution channels. The Company’s segments include Credit Card, Consumer Banking, Commercial Banking and Other. The Credit Card segment consists of its domestic consumer and small business card lending, and the international card lending businesses in Canada and the United Kingdom. The Consumer Banking segment consists of its branch-based lending and deposit gathering activities for consumers and small businesses, national deposit gathering, national auto lending and consumer home loan lending and servicing activities. The Commercial Banking consists of its lending, deposit gathering and treasury management services to commercial real estate, and commercial and industrial customers.
About Consumer Portfolio Services
Consumer Portfolio Services, Inc. is a specialty finance company. The Company’s business is to purchase and service retail automobile contracts originated primarily by franchised automobile dealers and by select independent dealers in the United States in the sale of new and used automobiles, light trucks and passenger vans. Through its automobile contract purchases, the Company provides indirect financing to the customers of dealers having limited credit histories, low incomes or past credit problems, who it refers to as sub-prime customers. It serves as an alternative source of financing for dealers, facilitating sales to customers. The Company offers approximately eight financing programs to its dealership customers and prices each program according to the relative credit risk. Its financing programs are Bravo, First Time Buyer, Mercury/Delta, Standard, Alpha, Alpha Plus, Super Alpha and Preferred.
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