Financial Analysis: Green Dot Corporation (GDOT) versus Capital One Financial Corporation (NYSE:COF)
Green Dot Corporation (NYSE: GDOT) and Capital One Financial Corporation (NYSE:COF) are both mid-cap business services companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, valuation, profitability, analyst recommendations, risk, dividends and earnings.
Earnings and Valuation
This table compares Green Dot Corporation and Capital One Financial Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Green Dot Corporation||$792.81 million||2.82||$116.52 million||$1.16||38.69|
|Capital One Financial Corporation||$19.13 billion||2.09||$3.31 billion||$6.83||12.12|
Capital One Financial Corporation has higher revenue and earnings than Green Dot Corporation. Capital One Financial Corporation is trading at a lower price-to-earnings ratio than Green Dot Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Green Dot Corporation and Capital One Financial Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Green Dot Corporation||7.66%||12.13%||4.83%|
|Capital One Financial Corporation||13.32%||7.92%||1.09%|
This is a summary of current ratings for Green Dot Corporation and Capital One Financial Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Green Dot Corporation||0||4||8||0||2.67|
|Capital One Financial Corporation||2||11||10||1||2.42|
Green Dot Corporation presently has a consensus price target of $40.00, indicating a potential downside of 10.87%. Capital One Financial Corporation has a consensus price target of $93.10, indicating a potential upside of 12.44%. Given Capital One Financial Corporation’s higher possible upside, analysts plainly believe Capital One Financial Corporation is more favorable than Green Dot Corporation.
Risk & Volatility
Green Dot Corporation has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Capital One Financial Corporation has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.
Institutional and Insider Ownership
81.2% of Green Dot Corporation shares are held by institutional investors. Comparatively, 87.7% of Capital One Financial Corporation shares are held by institutional investors. 11.0% of Green Dot Corporation shares are held by company insiders. Comparatively, 1.7% of Capital One Financial Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Capital One Financial Corporation pays an annual dividend of $1.60 per share and has a dividend yield of 1.9%. Green Dot Corporation does not pay a dividend. Capital One Financial Corporation pays out 23.4% of its earnings in the form of a dividend. Green Dot Corporation has raised its dividend for 4 consecutive years.
Capital One Financial Corporation beats Green Dot Corporation on 10 of the 18 factors compared between the two stocks.
About Green Dot Corporation
Green Dot Corporation (Green Dot) is a pro-consumer financial technology innovator. The Company is a provider of reloadable prepaid debit cards and cash reload processing services in the United States. The Company operates through two segments: Account Services, and Processing and Settlement Services. The Company’s account services segment includes branded deposit account programs, including Green Dot-branded and affinity-branded general purpose reloadable (GPR) card accounts; checking accounts, open-loop gift cards and secured credit cards. The Company’s processing and settlement services include its money processing services, which consists of reload services and 1099 disbursements, and its tax refund processing services. It also has operations in the mobile technology and mobile banking with GoBank mobile checking account. Through its subsidiary, SBBT Holdings, LLC (TPG), it also operates as a processor of tax refund disbursements in the United States.
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.
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