Capital One Financial Corp. (COF): Is it Time to Reconsider What’s in Your Wallet?

Hedge fund trade

At the end of its first quarter, Capital One Financial Corp. (NYSE:COF) had the most hedge fund interest among the three credit card companies with 58 hedge funds long the stock. Meanwhile, American Express Company (NYSE:AXP) had 47 hedge funds long the stock, a 15% decrease from the previous quarter. Billionaire Warren Buffett of Berkshire Hathaway owns close to $10.3 billion of American Express stock, comprising 12% of its total 13F portfolio. Close behind American Express was Discover, with 46 hedge funds long the stock, an 18% increase from the previous quarter.

Bottom line

Part of the story that makes Capital One Financial Corp. (NYSE:COF) appealing is that the stock trades at a hefty discount to both major peers on a price to book basis.

And it pays the highest dividend yield…

Capital One also has one of the top balance sheets, with a debt to equity ratio of 88%.

All in all, of these three major credit card companies, Capital One Financial Corp. (NYSE:COF) appears to be the best bet. However, American Express has a strong brand name and an affluent customer base that helps insulate the company from the broader economy, while Discover has made the foray into the housing market, which could be a long-term growth driver. Thus, both companies may also be worth a look.

The article Is it Time to Reconsider What’s in Your Wallet? originally appeared on Fool.com and is written by Marshall Hargrave.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends American Express. Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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