Critical Review: CPI Card Group (NASDAQ:PMTS) and Capital One Financial Corporation (COF)
CPI Card Group (NASDAQ: PMTS) and Capital One Financial Corporation (NYSE:COF) are both business services companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitabiliy.
Insider and Institutional Ownership
22.2% of CPI Card Group shares are held by institutional investors. Comparatively, 87.7% of Capital One Financial Corporation shares are held by institutional investors. 4.6% of CPI Card Group 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, hedge funds and large money managers believe a company is poised for long-term growth.
This is a breakdown of current recommendations for CPI Card Group and Capital One Financial Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|CPI Card Group||2||4||1||0||1.86|
|Capital One Financial Corporation||2||10||10||1||2.43|
CPI Card Group currently has a consensus price target of $4.90, suggesting a potential upside of 345.45%. Capital One Financial Corporation has a consensus price target of $93.26, suggesting a potential upside of 9.53%. Given CPI Card Group’s higher possible upside, research analysts clearly believe CPI Card Group is more favorable than Capital One Financial Corporation.
Valuation and Earnings
This table compares CPI Card Group and Capital One Financial Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|CPI Card Group||$270.44 million||0.23||$32.41 million||($0.12)||-9.17|
|Capital One Financial Corporation||$19.13 billion||2.15||$3.31 billion||$6.83||12.47|
Capital One Financial Corporation has higher revenue and earnings than CPI Card Group. CPI Card Group 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.
This table compares CPI Card Group and Capital One Financial Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|CPI Card Group||-2.46%||-1.55%||0.56%|
|Capital One Financial Corporation||13.32%||7.92%||1.09%|
CPI Card Group pays an annual dividend of $0.18 per share and has a dividend yield of 16.4%. Capital One Financial Corporation pays an annual dividend of $1.60 per share and has a dividend yield of 1.9%. CPI Card Group pays out -150.0% of its earnings in the form of a dividend. Capital One Financial Corporation pays out 23.4% 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. Capital One Financial Corporation has raised its dividend for 4 consecutive years. CPI Card Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
CPI Card Group has a beta of -0.13, indicating that its share price is 113% less volatile than the S&P 500. Comparatively, Capital One Financial Corporation has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500.
Capital One Financial Corporation beats CPI Card Group on 13 of the 18 factors compared between the two stocks.
CPI Card Group Company Profile
CPI Card Group Inc., formerly CPI Holdings I, Inc., provides Financial Payment Card solutions in North America. The Company is engaged in the design, production, data personalization, packaging and fulfillment of Financial Payment Cards, which it defines as credit cards, debit cards and prepaid debit cards issued on the networks of the Payment Card Brands in the United States, Europe and Canada. It is also engaged in the design, production, data personalization, packaging and fulfillment of retail gift and loyalty cards. Its segments include U.S. Debit and Credit, which produces Financial Payment Cards and provides integrated card services to card-issuing banks in the United States; U.S. Prepaid Debit, which provides integrated card services to Prepaid Debit Card issuers in the United States; U.K. Limited, which produces retail cards for customers in the United Kingdom and continental Europe, and Other, which has operations in Ontario, Canada and Petersfield, United Kingdom.
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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