Is Capital One Financial Stock a Buy?
Credit card debt has surged during the past couple of years, and lenders have seen net charge-offs and delinquencies rise. Capital One Financial (NYSE: COF), which is one of the largest consumer credit card issuers in the U.S., has seen its consumer credit quality decline. Despite this, the stock has surged 67% during the past year.
Capital One stock trades at a slight premium to its historical value, and its merger with Discover Financial Services (NYSE: DFS) remains in the air. If you're thinking of buying Capital One stock today, consider the following.
Consumer credit card debt is at a record $1.14 trillion, and credit card interest rates are also near the highest they've ever been. Rising debt and interest payments are a burden for consumers, and those on the lower end of the credit rating spectrum -- a demographic that's a significant portion of Capital One's customer base -- could be more vulnerable to an economic downturn.
Source Fool.com
