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Is Capital One (COF) a Great Value Stock Right Now?

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Zacks Equity Research
·2 min read
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Capital One (COF) is a stock many investors are watching right now. COF is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.67. This compares to its industry's average Forward P/E of 29.02. Over the past year, COF's Forward P/E has been as high as 64.36 and as low as 3.69, with a median of 11.76.

Investors will also notice that COF has a PEG ratio of 1.12. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. COF's PEG compares to its industry's average PEG of 3.03. COF's PEG has been as high as 7.15 and as low as 0.41, with a median of 1.47, all within the past year.

These are only a few of the key metrics included in Capital One's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, COF looks like an impressive value stock at the moment.


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