Latest news with #CapitalOneFinancial
Yahoo
2 days ago
- Business
- Yahoo
3 Warren Buffett Stocks to Buy Hand Over Fist in June
American Express has gradually grown into one of Berkshire's top positions. Capital One Financial recently became a more formidable credit card powerhouse. Fossil fuels may be on their way to being displaced by renewables, but that still leaves a long runway for companies like Occidental Petroleum. 10 stocks we like better than American Express › He may be set to step down as head of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) at the end of this year, but most of the conglomerate's stock holdings are still Warren Buffett's picks. So if you're looking for Buffett-approved ideas, Berkshire's portfolio is still the place to find them. Here are three in particular that you may want to dive into before the end of this month. After nearly two decades of slow and steady (and mostly unheralded) growth, but also due to the recent downsizing of its stake in Bank of America, American Express (NYSE: AXP) has become Berkshire Hathaway's second-biggest holding. With 151.6 million shares, Berkshire owns about 22% of the credit card lender, and that $44.5 billion position makes up 16% of the value of Berkshire's stock portfolio. What's so special about this seemingly ho-hum outfit that's inspired Buffett to not only stick with it for this long, but allow it to become such a major piece of Berkshire's portfolio? It's not nearly as surprising as it may seem at first glance. See, while American Express is frequently lumped together with Visa and Mastercard (for obvious reasons), it's not quite an apples-to-apples comparison. Its business could be better described as a marketing and rewards program that just happens to be centered around a card payments network. Its card holders are willing to pay as much as $700 per year for perks like credit toward streaming services, cash back on hotel stays, access to airport lounges, and other rewards. This is a surprisingly well-protected business model. Although it wouldn't be accurate to say that only affluent households hold Amex cards, the company certainly focuses on the higher-income crowd -- a demographic that isn't as adversely impacted by macroeconomic headwinds like the ones blowing now. For perspective, last quarter, the company's total billed business grew 6% year over year, boosting its currency-adjusted revenue by 8%. Restaurant spending was particularly strong, growing 8%, and underscoring the argument that bigger spenders aren't actually cutting back. American Express is also one of the few outfits that hasn't dialed back its full-year profit outlook. It's still expecting revenue growth of between 8% and 10% to produce earnings per share of between $15 and $15.50. That would be up roughly 14% from last year's earnings of $13.35 per share -- better profit growth than most companies are expected to produce this year. If American Express sits at one end of the consumerism continuum, Capital One Financial (NYSE: COF) occupies a space at the other. Although most people can qualify for a Capital One card, they're well suited for people looking to build (or rebuild) their credit. Still, there's plenty of demand for credit cards from the sections of the marketplace that it caters to, in addition to the piece of the business that Discover served before Capital One's recently completed acquisition of it. Don't underestimate this pairing, either. Combined, those now-merged outfits could loosen the firm grip that industry titans Mastercard and Visa have had on the credit card payments network market for a long time now. See, it's a mostly unrecognized nuance from the consumer perspective, but every credit card payment quietly involves several parties. Card issuers serve as the lenders to credit card-holding consumers, but those issuers also need a means of rapidly approving and processing payments for retailers and other merchants. Visa and Mastercard are the largest of the middleman outfits that provide those networks -- and who collect small fees for every transaction. Capital One has long relied on them, as do all the other issuers of cards with the Mastercard and Visa logos. AmEx operates its own payment network (albeit a smaller one) for its branded cards, keeping everything in house. Discover, however, is a lender that also runs a payments network of its own. Although it's still small by comparison, together, Capital One and Discover have enough scale, leverage, and technical capabilities to serve many customers without the involvement of Visa or Mastercard. There's no way Buffett saw this merger coming back in early 2023 when Berkshire Hathaway first established what is now a 7.1 million share stake in Capital One worth about $1.3 billion. In fact, the conglomerate has actually trimmed its position in the financial services company a bit since early 2024. It's a Buffett holding nonetheless, however, and one that Goldman Sachs recently added to its so-called "conviction list" of tickers that it firmly believes are undervalued and worth owning. Finally, add Occidental Petroleum (NYSE: OXY) to your list of Warren Buffett stocks to buy hand over fist this month. Against the backdrop of renewable energy's proliferation and growing efforts by governments, businesses, and individuals worldwide to reduce their use of fossil fuels, an oil and natural gas extractor like Occidental might not seem to be an obvious holding for a highly traditional and old-school stock picker like Buffett. Yet despite the continued adoption of renewable energy sources, the world will still need more and more oil for a long time. Researchers at Goldman Sachs don't believe we'll reach "peak oil" -- the point at which the average daily consumption of crude oil stops growing and starts shrinking -- until 2034, in fact, and even beyond that point, we'll need lots of it for several more decades. OPEC doesn't believe crude consumption's growth will peak until 2045 at the earliest, while oil giant ExxonMobil is forecasting that oil demand will peak in 2030, but also anticipates that in 2050, we'll still need about the same amount of it that we do in 2030. And it expects that overall, in 25 years, oil and natural gas will still account for more than half of the global energy mix. In other words, there's still lots of good money to be made in the fossil fuel business by a low-cost operator like Occidental Petroleum. To the extent the oil and natural gas industry business is living on borrowed time, though, Occidental is evolving brilliantly. The company's carbon-capture technology (literally) sucks carbon dioxide out of the ambient air. The business just needs scale, which is being encouraged by incentives. That's one of the chief reasons Precedence Research believes the global carbon capture market will grow at an annualized rate of more than 21% through 2034. This stock hasn't been a strong performer since late 2022. Indeed, it has lost nearly half its value since then. That's only because oil prices have been in a slump since then, though, dragging the industry's earnings down with it. Buffett has been unfazed, however. Not only has he stuck with Occidental, he has added to Berkshire's stake, growing it into a 264.9 million share position worth, at current share prices, about $13 billion. That's nearly 6% of Berkshire's stock portfolio and 27% of Occidental Petroleum's entire float. Before you buy stock in American Express, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and American Express wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America, Berkshire Hathaway, Goldman Sachs Group, Mastercard, and Visa. The Motley Fool recommends Capital One Financial and Occidental Petroleum. The Motley Fool has a disclosure policy. 3 Warren Buffett Stocks to Buy Hand Over Fist in June was originally published by The Motley Fool
Yahoo
20-05-2025
- Business
- Yahoo
Capital One Strengthens Credit Card Business with Discover Acquisition
Capital One Financial Corporation (NYSE:COF) has strengthened its edge as a leading provider of credit card services with the acquisition of Discover Financial Services. On May 18, the company confirmed the completion of the $35 billion acquisition, poised to result in the largest credit card firm by loan volume. Additionally, the merger results in a solid combined company able to change banking for millions of customers. A finance executive with a satisfied smile reviewing a pile of documents in their office. The closing of the $35 billion deal comes against the backdrop of heightened scrutiny from Democratic lawmakers last year amid concerns it would reduce competition in the industry. There have been concerns that Capital One Financial will have an unfair advantage, an edge that could end up harming low-income customers. Amid the concerns, Discover Financial Services will continue to offer Discover credit card products with other consumer cards offered by Capital One in a bid to alleviate the antitrust concerns. Capital One has also reiterated its commitment to supporting local communities and expanding economic and financial opportunities as part of a $265 billion Community Benefits Plan. The completion of the Discover Financial Services acquisition comes on the heels of Capital One Financial delivering impressive Q1 2025 results, whereby profit rose significantly, helped by higher income on interest payments on credit card debt. Net interest on its credit card business grew 7% to $8.01 billion as non-interest income rose 4% to $1.99 billion. While we acknowledge the potential of Capital One Financial Corporation (NYSE:COF) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BMRN and that has 100x upside potential, check out our report about the cheapest AI stock. READ NEXT: and . Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
- Yahoo
Why You Might Be Interested In Capital One Financial Corporation (NYSE:COF) For Its Upcoming Dividend
Capital One Financial Corporation (NYSE:COF) is about to trade ex-dividend in the next two days. The ex-dividend date is usually set to be one business day before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Meaning, you will need to purchase Capital One Financial's shares before the 23rd of May to receive the dividend, which will be paid on the 5th of June. The company's next dividend payment will be US$0.60 per share. Last year, in total, the company distributed US$2.40 to shareholders. Last year's total dividend payments show that Capital One Financial has a trailing yield of 1.2% on the current share price of US$197.41. If you buy this business for its dividend, you should have an idea of whether Capital One Financial's dividend is reliable and sustainable. As a result, readers should always check whether Capital One Financial has been able to grow its dividends, or if the dividend might be cut. We check all companies for important risks. See what we found for Capital One Financial in our free report. Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Capital One Financial paid out just 20% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend. See our latest analysis for Capital One Financial Click here to see the company's payout ratio, plus analyst estimates of its future dividends. Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're not enthused to see that Capital One Financial's earnings per share have remained effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share. Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Capital One Financial has delivered 7.2% dividend growth per year on average over the past 10 years. Is Capital One Financial an attractive dividend stock, or better left on the shelf? Capital One Financial has seen its earnings per share stagnate in recent years, although the company reinvests more than half of its profits in the business, which could bode well for its future prospects. Capital One Financial ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention. Ever wonder what the future holds for Capital One Financial? See what the 10 analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
19-05-2025
- Business
- Yahoo
Capital One closes $35.3bn acquisition of Discover Financial Services
Capital One Financial has concluded the $35.3bn acquisition of US-based Discover Financial Services. The acquisition received necessary approvals from regulatory bodies, including the board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency in April this year, and the Delaware State Bank Commissioner in December 2024. Shareholders from both Capital One and Discover voted in favour of the acquisition in February 2025. As part of the acquisition, Capital One has increased its board of directors from 12 to 15 members, appointing Thomas Maheras, Michael Shepherd, and Jennifer Wong, who were previously on Discover's board, to the new positions. Currently, customer accounts and banking relationships for both Capital One and Discover will remain unchanged. Capital One plans to maintain the Discover credit card products under the Discover brand, alongside its existing range of consumer cards. The acquisition will also integrate the Discover, PULSE, and Diners Club International networks into Capital One's offerings. Capital One founder and CEO Richard Fairbank said: 'This deal brings together two innovative, mission-driven companies that together are poised to deliver breakthrough products and experiences to consumers, businesses, and merchants.' Legal advisory services for Capital One were provided by Wachtell, Lipton, Rosen & Katz, with Cleary Gottlieb acting as co-antitrust legal advisor and Centerview Partners serving as financial advisor. Discover was advised by Sullivan & Cromwell, with financial advisory support from PJT Partners and Morgan Stanley. Capital One Financial and offers a range of financial products and services to consumers, small businesses, and commercial clients through various channels. As of 30 March 2025, the company and its subsidiaries reported $367.5bn in deposits and total assets amounting to $493.6bn. "Capital One closes $35.3bn acquisition of Discover Financial Services" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
18-05-2025
- Business
- Bloomberg
Capital One Finishes Discover Acquisition After 15-Month Journey
Almost 15 months after its announcement, Capital One Financial Corp. 's takeover of Discover Financial Services was officially completed on Sunday, creating the largest credit-card issuer by loan volume in the US. Armed with Discover's payments network, which competes with those of Visa Inc. and Mastercard Inc., Capital One is poised to capture an even greater share of spending on credit and debit cards that Americans so heavily rely upon.
