Consumer Portfolio Services (NASDAQ: CPSS) and Capital One Financial Corporation (NYSE:COF) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitabiliy.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Consumer Portfolio Services and Capital One Financial Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Consumer Portfolio Services 0 1 1 0 2.50
Capital One Financial Corporation 2 10 10 1 2.43

Consumer Portfolio Services currently has a consensus price target of $6.00, indicating a potential upside of 43.88%. Capital One Financial Corporation has a consensus price target of $93.26, indicating a potential upside of 9.98%. Given Consumer Portfolio Services’ stronger consensus rating and higher probable upside, research analysts clearly believe Consumer Portfolio Services is more favorable than Capital One Financial Corporation.

Volatility and Risk

Consumer Portfolio Services has a beta of 1.72, suggesting that its stock price is 72% more volatile than the S&P 500. Comparatively, Capital One Financial Corporation has a beta of 1.19, suggesting that its stock price is 19% 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 1.9%. 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. Capital One Financial Corporation has increased its dividend for 4 consecutive years.

Insider & Institutional Ownership

47.5% of Consumer Portfolio Services shares are held by institutional investors. Comparatively, 88.3% of Capital One Financial Corporation shares are held by institutional investors. 37.5% of Consumer Portfolio Services shares are held by insiders. Comparatively, 1.7% of Capital One Financial Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Consumer Portfolio Services and Capital One Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Consumer Portfolio Services 5.49% 12.90% 0.99%
Capital One Financial Corporation 13.32% 7.92% 1.09%

Valuation and Earnings

This table compares Consumer Portfolio Services and Capital One Financial Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Consumer Portfolio Services $162.02 million 0.60 $19.67 million $0.85 4.91
Capital One Financial Corporation $19.13 billion 2.15 $3.31 billion $6.83 12.42

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.

Summary

Capital One Financial Corporation beats Consumer Portfolio Services on 12 of the 18 factors compared between the two stocks.

Consumer Portfolio Services Company Profile

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.

Capital One Financial Corporation Company Profile

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.

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