5 Best Bank Stocks to Buy Amid Rising Inflation

4. Capital One Financial Corporation (NYSE:COF)

Number of Hedge Fund Holders: 56

Capital One Financial Corporation (NYSE:COF), a Fortune 500 company, operates as a bank holding company through various segments: credit card, consumer banking and commercial banking. As of June 20, the firm has a forward P/E ratio of 5.34 and a forward dividend yield of 2.24%.

In 2021, Capital One Financial Corporation (NYSE:COF) repurchased shares worth $7.5 million. The company announced a buyback plan of $5 billion in January 2022. On April 1, the board of directors authorized a further share repurchase of $5 billion which will begin in the third quarter of 2022.

On June 17, Capital One Financial Corporation (NYSE:COF) was upgraded to Outperform from Neutral by Baird analyst David George.

Davis Funds mentioned Capital One Financial Corporation (NYSE:COF) in its fourth-quarter 2021 investor letter. Here is what it said:

“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.

Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Capital One Financial.”