Head to Head Analysis: Banc of California (BANC) vs. Capital One Financial (COF)

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

Institutional & Insider Ownership

88.3% of Capital One Financial shares are owned by institutional investors. 18.1% of Banc of California shares are owned by company insiders. Comparatively, 1.4% of Capital One Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Banc of California has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Capital One Financial has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Valuation & Earnings

This table compares Banc of California and Capital One Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banc of California $501.02 million 1.86 $57.70 million $0.82 22.40
Capital One Financial $30.00 billion 1.46 $1.98 billion $7.79 11.74

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

Dividends

Banc of California pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. Capital One Financial pays an annual dividend of $1.60 per share and has a dividend yield of 1.7%. Banc of California pays out 63.4% of its earnings in the form of a dividend. Capital One Financial pays out 20.5% 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.

Analyst Recommendations

This is a summary of recent recommendations for Banc of California and Capital One Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banc of California 1 2 2 0 2.20
Capital One Financial 0 6 13 0 2.68

Banc of California currently has a consensus price target of $21.75, indicating a potential upside of 18.40%. Capital One Financial has a consensus price target of $111.32, indicating a potential upside of 21.68%. Given Capital One Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Capital One Financial is more favorable than Banc of California.

Profitability

This table compares Banc of California and Capital One Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banc of California 11.74% 8.25% 0.59%
Capital One Financial 10.73% 10.44% 1.42%

Summary

Capital One Financial beats Banc of California on 11 of the 16 factors compared between the two stocks.

Banc of California Company Profile

Banc of California, Inc. operates as the bank holding company for Banc of California, National Association that provides banking products and services in the United States. The company's deposits consist of checking, savings, money market, retirement, and interest and non-interest bearing demand accounts, as well as certificates of deposit; and commercial and consumer loan products include commercial and industrial loans, commercial real estate loans, multi-family loans, small business administration (SBA) guaranteed business loans, construction and renovation loans, single family residential mortgage loans, warehouse loans, asset-insurance-or security backed loans, home equity lines of credit, consumer and business lines of credit, home equity loans, and other consumer loans. It also invests in SBA loan pool securities, mortgage-backed securities, corporate bonds, and collateralized loan obligations. In addition, the company offers automated bill payment, cash and treasury management, foreign exchange, interest rate swaps, card payment services, remote and mobile deposit capture, ACH origination, wire transfer, direct deposit services, and safe deposit boxes, as well as Internet banking services. As of December 31, 2017, it operated 34 branches in San Diego, Orange, Santa Barbara, and Los Angeles counties in California. The company was formerly known as First PacTrust Bancorp, Inc. and changed its name to Banc of California, Inc. in July 2013. Banc of California, Inc. was founded in 1941 and is headquartered in Santa Ana, California.

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 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.

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