Performance Comparison of Capital One Financial Corporation (COF) and Alphabet Inc. (GOOG)

The shares of Capital One Financial Corporation (NYSE:COF) and Alphabet Inc. (NASDAQ:GOOG) were among the active stocks of the last trading sessions. Capital One Financial Corporation (NYSE:COF) declined to -2.81% closing at the price of $90.94 whereas the shares of Alphabet Inc. (NASDAQ:GOOG) declined -0.18% with the decrease of -1.9 points closing at the price of $1079.32. Capital One Financial Corporation has currently decrease -5.65% in its stock over the period of 6-months while its rival Alphabet Inc. added 4.86% in the previous 6-months.

Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.

Returns and Profitability

Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.

The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Capital One Financial Corporation (NYSE:COF) is 13.3% while the ROI of Alphabet Inc. (NASDAQ:GOOG) is 0%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, COF’s EBITDA Margin is NOT AVAILABLE whereas GOOG’s is 18.5.

Both the profitability ratios suggest that Capital One Financial Corporation (NYSE:COF) is more suitable investment in terms of profitability and return.

EPS & Surprise Factor

Capital One Financial Corporation (NYSE:COF) reported $3.71/share EPS for the previous quarter where analysts were predicting an EPS to be $2.63/share Thus beating the analyst Estimates with a Surprise Factor of 41.1 Percent. While, Alphabet Inc. (NASDAQ:GOOG) reported EPS of $4.54/share in the last quarter. The analysts projected EPS of $9.54/share depicting a Surprise of -52.4 Percent.

Taking a look at Earnings per Share, Capital One Financial Corporation tends to be beating the analyst estimates more than Alphabet Inc.. so COF is more profitable than GOOG.

Technical Analysis of Capital One Financial Corporation & Alphabet Inc.

Moving average convergence divergence (MACD) shows that Capital One Financial Corporation (NYSE:COF) is on a PRICE RELATIVITY trend While Alphabet Inc. (NASDAQ:GOOG) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Capital One Financial Corporation was in BEARISH territory and Alphabet Inc. was in BEARISH territory.

COF’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While GOOG’s candle is BULLISH with HIGH.

EPS Growth Rate: COF’s 11.85% versus GOOG’s 17.37%

Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Capital One Financial Corporation (NYSE:COF) is predicted at 11.85% while Alphabet Inc. (NASDAQ:GOOG) stands at 17.37%. These numbers suggest that GOOG is more suitable investment in terms of EPS growth rate.

Financial Risk and Liquidity Concerns

The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of COF stands at 0 while GOOG is at 0 whereas the debt ratio of the prior is 1.06 while the debt ratio of the later is 0.

The values of the both ratios suggest that one is more liquid and other investment is more risk free.

Analyst Recommendations

While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2 for COF and 1.6 for GOOG which means COF has Buy rating whereas GOOG has Buy rating.

Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for COF is $115.36 which is 21.17% of its current price while GOOG has price target of 1354 which is 20.29% of its current price.

Valuation Ratios

Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.

COF currently has price to earning P/E ratio of 8.8 whereas GOOG has 46.61 while the forward P/E ratio for the prior stands at 8.09 and for the later it depicts the value of 22.48.

The price to Book P/B for COF is 0.88, Price to Sale is at 1.67 and for GOOG these ratios stand at 4.64 and 5.93.