Capital One Financial (NYSE:COF) and Nelnet (NYSE:NNI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.
Earnings & Valuation
This table compares Capital One Financial and Nelnet's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Capital One Financial | $33.77 billion | 1.85 | $5.55 billion | $12.09 | 11.31 |
Nelnet | $1.78 billion | 1.62 | $141.80 million | N/A | N/A |
Capital One Financial has higher revenue and earnings than Nelnet.
Dividends
Capital One Financial pays an annual dividend of $1.60 per share and has a dividend yield of 1.2%. Nelnet pays an annual dividend of $0.88 per share and has a dividend yield of 1.2%. Capital One Financial pays out 13.2% of its earnings in the form of a dividend. Capital One Financial has increased its dividend for 1 consecutive years and Nelnet has increased its dividend for 6 consecutive years. Nelnet is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Capital One Financial and Nelnet's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Capital One Financial | 4.08% | 3.05% | 0.43% |
Nelnet | 10.09% | 7.53% | 0.78% |
Insider & Institutional Ownership
89.6% of Capital One Financial shares are held by institutional investors. Comparatively, 34.7% of Nelnet shares are held by institutional investors. 1.5% of Capital One Financial shares are held by company insiders. Comparatively, 45.0% of Nelnet shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Capital One Financial has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500. Comparatively, Nelnet has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings for Capital One Financial and Nelnet, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Capital One Financial | 0 | 2 | 14 | 0 | 2.88 |
Nelnet | 0 | 0 | 1 | 0 | 3.00 |
Capital One Financial currently has a consensus target price of $123.8571, indicating a potential downside of 9.38%. Nelnet has a consensus target price of $75.00, indicating a potential downside of 0.21%. Given Nelnet's stronger consensus rating and higher possible upside, analysts clearly believe Nelnet is more favorable than Capital One Financial.
Summary
Nelnet beats Capital One Financial on 9 of the 16 factors compared between the two stocks.