Capital One Financial Corp. (COF), Wells Fargo & Co (WFC), U.S. Bancorp (USB): One Stock Crushing the Competition but Overlooked by Investors

While Capital One is again bested by U.S. Bancorp (NYSE:USB) in this ever-important measurement, it still maintained a ratio that topped those of its peers.

It is important to note that Capital One does trail peers U.S. Bancorp (NYSE:USB) and Wells Fargo & Co (NYSE:WFC) in return on equity:

Source: Company Earnings Reports.

Its ROE doesn’t match that of its peers, but that’s partly because Capital One is not as leveraged as its competitors. Because of the inherent riskiness of credit card loans (Capital One’s largest loan type), the bank chooses to use slightly less leverage — which keeps returns on equity relatively lower.

Naturally, investors are often more willing to pay a premium for the equity of companies with higher returns on that equity base. One way to tell how much that premium is by checking a company’s price to tangible book value, or P/TBV. This measures the premium (or discount) investors pay compared to what tangible equity the company holds on its balance sheet:

COF Price / Tangible Book Value data by YCharts.

However, Capital One Financial Corp. (NYSE:COF)’s lower price-to-tangible book value should help ease any investor concerns. With a low P/TBV and margins on the rise, Capital One looks more and more each day like something you would not only want in your wallet, but also in your portfolio.

The article 1 Stock Crushing the Competition but Overlooked by Investors originally appeared on Fool.com and is  written by Patrick Morris.

Patrick Morris owns shares of US Bancorp (NYSE:USB). The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of PNC Financial Services (NYSE:PNC) and Wells Fargo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.