Head to Head Survey: Capital One Financial (NYSE:COF) vs. Regional Management (NYSE:RM)

Regional Management (NYSE:RM) and Capital One Financial (NYSE:COF) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.

Volatility and Risk

Regional Management has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Capital One Financial has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500.

Dividends

Regional Management pays an annual dividend of $1.20 per share and has a dividend yield of 3.1%. Capital One Financial pays an annual dividend of $2.40 per share and has a dividend yield of 1.1%. Regional Management pays out 34.6% of its earnings in the form of a dividend. Capital One Financial pays out 123.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Regional Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and target prices for Regional Management and Capital One Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regional Management	0	1	1	0	2.50
Capital One Financial	0	4	13	3	2.95

Regional Management currently has a consensus price target of $34.00, indicating a potential downside of 11.50%. Capital One Financial has a consensus price target of $238.8125, indicating a potential upside of 8.02%. Given Capital One Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Capital One Financial is more favorable than Regional Management.

Profitability

This table compares Regional Management and Capital One Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regional Management	5.68%	10.91%	2.05%
Capital One Financial	N/A	10.01%	1.40%

Institutional & Insider Ownership

98.9% of Regional Management shares are held by institutional investors. Comparatively, 89.8% of Capital One Financial shares are held by institutional investors. 10.8% of Regional Management shares are held by company insiders. Comparatively, 1.3% of Capital One Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Regional Management and Capital One Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regional Management	$588.50 million	0.64	$41.23 million	$3.47	11.07
Capital One Financial	$53.94 billion	2.62	$4.75 billion	$1.95	113.37

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

Summary

Regional Management beats Capital One Financial on 9 of the 17 factors compared between the two stocks.

About Regional Management

Regional Management Corp., a diversified consumer finance company, provides various installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders in the United States. It offers small and large installment loans; and retail loans to finance the purchase of furniture, appliances, and other retail products. The company also provides insurance products, including credit life, credit accident and health, credit property, vehicle single interest, and credit involuntary unemployment insurance; collateral protection insurance; and property insurance, as well as reinsurance products. In addition, its loans are sourced through branches, centrally-managed direct mail campaigns, and digital partners, as well as its consumer website. The company was incorporated in 1987 and is headquartered in Greer, South Carolina.

About Capital One Financial

Capital One Financial Corporation operates as the financial services holding company for the Capital One, National Association, which engages in the provision of various financial products and services in the United States, Canada, and the United Kingdom. It operates through three segments: Credit Card, Consumer Banking, and Commercial Banking. The company accepts checking accounts, money market deposits, negotiable order of withdrawals, savings deposits, and time deposits. Its loan products include credit card loans; auto and retail banking loans; and commercial and multifamily real estate, and commercial and industrial loans. The company also offers credit and debit card products; online direct banking services; and provides advisory, capital markets, treasury management, and depository services. It serves consumers, small businesses, and commercial clients through digital channels, branches, cafés, and other distribution channels located in New York, Louisiana, Texas, Maryland, Virginia, New Jersey, and California. The company was founded in 1988 and is headquartered in McLean, Virginia.