Head to Head Contrast: Upstart (NASDAQ:UPST) versus Capital One Financial (NYSE:COF)

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Capital One Financial and Upstart, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital One Financial	0	4	20	0	2.83
Upstart	1	9	7	0	2.35

Capital One Financial presently has a consensus target price of $256.50, indicating a potential upside of 31.11%. Upstart has a consensus target price of $32.40, indicating a potential upside of 58.75%. Given Upstart’s higher possible upside, analysts plainly believe Upstart is more favorable than Capital One Financial.

Risk & Volatility

Capital One Financial has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Upstart has a beta of 2.48, meaning that its share price is 148% more volatile than the S&P 500.

Valuation & Earnings

This table compares Capital One Financial and Upstart”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital One Financial	$63.01 billion	1.87	$2.45 billion	$16.94	11.55
Upstart	$1.04 billion	1.93	$53.60 million	$0.59	34.59

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

Insider & Institutional Ownership

89.8% of Capital One Financial shares are owned by institutional investors. Comparatively, 63.0% of Upstart shares are owned by institutional investors. 0.8% of Capital One Financial shares are owned by company insiders. Comparatively, 17.3% of Upstart shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Capital One Financial	13.70%	11.64%	1.94%
Upstart	4.86%	9.67%	2.50%

Summary

Capital One Financial beats Upstart on 8 of the 14 factors compared between the two stocks.

About Capital One Financial

Capital One Financial Corporation is a bank holding company that provides credit cards, consumer banking, auto financing and commercial banking services. Its offerings include credit cards, deposit accounts, loans and financial services for businesses. The company traces its roots to a credit card business established within Signet Banking Corporation in 1988 and became an independent company in 1994. Capital One is headquartered in McLean, Virginia, and serves customers primarily in the United States, with credit card operations also in the United Kingdom.

About Upstart

Upstart Holdings, Inc. operates an artificial intelligence–based lending marketplace that connects consumers seeking loans with banks and credit unions. Its platform uses machine-learning models and borrower data to help lending partners assess credit risk and make lending decisions. The company’s offerings include personal loans and technology for auto lending, including auto retail and refinancing. Upstart was founded in 2012 by Dave Girouard, Paul Gu and Anna Counselman. Girouard serves as the company’s chief executive officer.