10 Best Financial Stocks to Buy According to Billionaires

3. Capital One Financial Corporation (NYSE:COF)

Number of Billionaire Investors: 22

Capital One Financial Corporation (NYSE:COF) is a financial services company that operates in the United States, Canada, and the United Kingdom, offering a range of banking and lending products. It has three main segments – Credit Card, Consumer Banking, and Commercial Banking. BTIG analysts see huge potential for COF, predicting it could jump over 137% to $427 per share if the Discover merger goes through. They upgraded the stock to Buy from Hold, believing Capital One could use Discover’s payment network to take on Visa and Mastercard. Even if the deal doesn’t happen, the analysts still see upside, expecting Capital One Financial Corporation (NYSE:COF) to use its excess capital for $25 billion in stock buybacks. Bullish analyst sentiment, paired with the favor of 22 billionaire investors, makes COF one of the best financial stocks.

Capital One reported $1.1 billion in Q4 earnings, or $2.67 per share, and $4.8 billion for the year, which comes in at $11.59 per share. Adjusted earnings were $3.09 per share for Q4 and $13.96 for the year, factoring in Discover integration and legal costs. Credit loss provisions increased to $2.6 billion, while reserves dropped to $16.3 billion. Liquidity reserves also fell to $124 billion due to seasonal spending. Credit card performance remained strong, with purchase volume up 7% and revenue increasing 9% year-over-year. Capital One Financial Corporation (NYSE:COF)’s net income was impacted by loan growth, dividend payouts, and $150 million in share buybacks. The company has consistently paid quarterly dividends since 1995.

On March 18, Keefe, Bruyette & Woods maintained an Outperform rating and $232 target on Capital One Financial Corporation (NYSE:COF), dismissing antitrust concerns over its Discover deal as overblown. The firm noted the DOJ’s role is advisory, with final approval resting with the Fed and OCC, and remains bullish on the deal’s approval.