Capital One Financial Corp. (COF), Citigroup Inc (C): What Really Is In Your Wallet?

While some consumers may be shying away from credit, others are continuing to see the benefits, and that’s keeping revenue and profits high for large payment processing companies like Capital One Financial Corp. (NYSE:COF). This entity, that operates as a bank holding company for the Capital One Bank, is focused on three primary segments — credit cards, consumer banking, and commercial banking — and is the sixth largest U.S. bank based on deposits.

What really is in your wallet?

Capital One Financial Corp. (NYSE:COF) possesses a sizable market capitalization of just over $33 billion. Although the company has many positive attributes in terms of investment potential, its shares are down approximately 1.3% year-to-date.

One potential drawback of late is the company’s payment in excess of $3 million in order to settle federal civil charges for under-reporting more than $120 million in losses in its auto loan segment. These losses occurred in the months leading up to the 2008 financial crisis.

Even so, Capital One Financial Corp. (NYSE:COF) is strong in numerous areas, including impressive earnings growth which were up nearly 23% during the first quarter of 2013. In addition, the firm’s PEG ratio is also low at 1.25, which is a positive sign for a financial services operation.

While income is only $0.20 per share, analysts expect Capital One shares to rise nearly 13% over the next 12 months. This is great news for both potential shareholders as well as current investors, who are seeing roughly $6.5 in EPS this year. With a net profit margin in the high double-digits, Capital One Financial Corp. (NYSE:COF) shares have very good upside potential, especially if the overall market continues to improve.

Giving credit to other big players in the financial services market

Another financial services giant, Citigroup Inc (NYSE:C), is also faring nicely in the post-recessionary economy. This global diversified financial services holding company provides consumers, businesses, and governments with numerous financial products and services.

Citigroup Inc (NYSE:C) has been preparing itself regarding an agreement with ING Groep NV (ADR) (NYSE:ING) to purchase ING’s custody and securities business. Although the deal may not be fully finalized until the first quarter of 2014 as it is currently awaiting regulatory approvals, the company may stand to substantially profit as Citigroup Inc (NYSE:C)‘s custody network will broaden to more than 95 markets and 62 countries.

Though selling custody services, mostly in the central and eastern Europe, the deal will help ING Groep NV (ADR) (NYSE:ING) scale back its commercial banking operations.