Contrasting Capital One Financial (NYSE:COF) and PRA Group (NASDAQ:PRAA)

PRA Group (NASDAQ:PRAA) and Capital One Financial (NYSE:COF) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares PRA Group and Capital One Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PRA Group	$1.34 billion	0.58	-$305.14 million	($6.73)	-3.06
Capital One Financial	$69.25 billion	2.01	$2.45 billion	$16.16	14.06

Capital One Financial has higher revenue and earnings than PRA Group. PRA Group 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.

Volatility & Risk

PRA Group has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Capital One Financial has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for PRA Group and Capital One Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PRA Group	1	2	1	1	2.40
Capital One Financial	0	3	21	0	2.88

PRA Group presently has a consensus target price of $26.00, suggesting a potential upside of 26.21%. Capital One Financial has a consensus target price of $259.36, suggesting a potential upside of 14.16%. Given PRA Group’s higher possible upside, equities analysts clearly believe PRA Group is more favorable than Capital One Financial.

Insider & Institutional Ownership

97.2% of PRA Group shares are held by institutional investors. Comparatively, 89.8% of Capital One Financial shares are held by institutional investors. 2.2% of PRA Group shares are held by insiders. Comparatively, 0.8% of Capital One Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PRA Group	-19.91%	15.56%	3.18%
Capital One Financial	13.37%	11.28%	1.90%

Summary

Capital One Financial beats PRA Group on 8 of the 15 factors compared between the two stocks.

About PRA Group

PRA Group, Inc., a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies. The company also acquires nonperforming loans, including Visa and MasterCard credit card accounts, private label and other credit card accounts, personal loans, automobile loans, and small business loans from banks, credit unions, consumer finance companies, retailers, utilities, automobile finance companies, and other credit originators. In addition, it provides fee-based services on class action claims recoveries. The company was formerly known as Portfolio Recovery Associates, Inc. and changed its name to PRA Group, Inc. in October 2014. PRA Group, Inc. was founded in 1996 and is headquartered in Norfolk, Virginia.

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.