10 Cheap Value Stocks to Invest in According to Warren Buffett

8. Capital One Financial Corp. (NYSE:COF)

Forward Price to Earnings Ratio: 11.49

Berkshire Hathaway Stake Value: $1.36 Billion

Number of Hedge Fund Holders: 67

Capital One Financial Corp. (NYSE:COF) is a financial services holding company that provides various financial products and services. It accepts checking accounts, money market deposits, and negotiable orders of withdrawals, savings, and time deposits. It is one of the best banking stocks after rallying by about 37% in 2024.

Due in large part to higher interest rates, Capital One Financial Corp. (NYSE:COF) delivered impressive third-quarter results depicted by a 1.6% increase in profits from credit card debt repayments. Net interest income increased by nearly 9% to about $8.1 billion as the financial institution benefited from higher interest rates. It is highly unlikely that the interest rate-cutting spree by the Fed will negatively impact net interest income. Reduced interest rates will likely give people and businesses a reason to take in more loans due to lower borrowing costs.

Additionally, Capital One Financial Corp. (NYSE:COF) is looking to expand its footprint in the financial services sector with the acquisition of Discover Financial Services (NYSE:DFS) in a $35 billion deal. The acquisition should result in the US’ biggest credit card issuer by loan volume. The deal should allow the company to pursue growth opportunities needed to generate more free cash flow to continue rewarding investors with its 1.33% dividend yield.