Capital One Financial Corporation (NYSE: COF) and Blackhawk Network Holdings (NASDAQ:HAWK) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitabiliy.

Institutional & Insider Ownership

88.9% of Capital One Financial Corporation shares are owned by institutional investors. Comparatively, 99.6% of Blackhawk Network Holdings shares are owned by institutional investors. 1.7% of Capital One Financial Corporation shares are owned by company insiders. Comparatively, 3.8% of Blackhawk Network Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Capital One Financial Corporation has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500. Comparatively, Blackhawk Network Holdings has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Profitability

This table compares Capital One Financial Corporation and Blackhawk Network Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Capital One Financial Corporation 12.96% 7.83% 1.08%
Blackhawk Network Holdings -0.27% 8.36% 2.41%

Dividends

Capital One Financial Corporation pays an annual dividend of $1.60 per share and has a dividend yield of 2.0%. Blackhawk Network Holdings does not pay a dividend. Capital One Financial Corporation pays out 24.3% of its earnings in the form of a dividend. Blackhawk Network Holdings has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations for Capital One Financial Corporation and Blackhawk Network Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capital One Financial Corporation 3 9 11 1 2.42
Blackhawk Network Holdings 0 5 6 0 2.55

Capital One Financial Corporation currently has a consensus target price of $92.35, indicating a potential upside of 16.13%. Blackhawk Network Holdings has a consensus target price of $41.73, indicating a potential downside of 2.62%. Given Capital One Financial Corporation’s higher probable upside, equities analysts clearly believe Capital One Financial Corporation is more favorable than Blackhawk Network Holdings.

Valuation & Earnings

This table compares Capital One Financial Corporation and Blackhawk Network Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Capital One Financial Corporation $18.89 billion 2.03 $3.17 billion $6.58 12.09
Blackhawk Network Holdings $1.94 billion 1.24 $138.65 million ($0.10) -428.50

Capital One Financial Corporation has higher revenue and earnings than Blackhawk Network Holdings. Blackhawk Network Holdings is trading at a lower price-to-earnings ratio than Capital One Financial Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Capital One Financial Corporation beats Blackhawk Network Holdings on 10 of the 18 factors compared between the two stocks.

Capital One Financial Corporation Company Profile

Capital One Financial Corporation is a diversified financial services holding company. The Company, along with its subsidiaries, offers a range of financial products and services to consumers, small businesses and commercial clients through branches, the Internet and other distribution channels. The Company’s segments include Credit Card, Consumer Banking, Commercial Banking and Other. The Credit Card segment consists of its domestic consumer and small business card lending, and the international card lending businesses in Canada and the United Kingdom. The Consumer Banking segment consists of its branch-based lending and deposit gathering activities for consumers and small businesses, national deposit gathering, national auto lending and consumer home loan lending and servicing activities. The Commercial Banking consists of its lending, deposit gathering and treasury management services to commercial real estate, and commercial and industrial customers.

Blackhawk Network Holdings Company Profile

Blackhawk Network Holdings, Inc. is a prepaid payment network. The Company operates through three segments: U.S. Retail, International, and Incentives & Rewards. The U.S. Retail segment is engaged in the sale of prepaid products to consumers at its retail distribution partners and online and the sale of telecom handsets to retail distribution partners for resale to consumers. Its Incentives & Rewards segment is engaged in the sale of prepaid products, software and services to its business clients. It distributes closed loop gift cards in categories, including digital media and e-commerce, dining, electronics, entertainment, fashion and travel. It distributes a range of prepaid wireless or cellular cards. It also provides reloads for reloadable prepaid products, including prepaid telecom accounts and general-purpose reloadable cards. Its incentives businesses provide software, consulting services, program management, reward processing and reward fulfillment to its business clients.

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