Capital One Investing: A Guide to Making Informed Decisions

Making informed decisions about your investments is crucial to achieving your financial goals. Capital One Investing offers a range of tools and resources to help you make the most of your money.

Capital One Investing allows you to trade stocks, bonds, and ETFs online or through their mobile app. You can also invest in a variety of accounts, including Individual Retirement Accounts (IRAs) and 529 college savings plans.

Investing with Capital One Investing can be a convenient and cost-effective way to grow your wealth. By using their platform, you can take control of your investments and make changes as needed.

Capital One Investing offers competitive pricing and no fees for online trading. This can help you save money and keep more of your hard-earned cash.

Capital One's stock price is up over 2,600% since it came public in late 1994.

This impressive performance is a testament to the company's aggressive approach to generating big rewards, but it also comes with big risks.

The company's focus on lending money to higher-risk borrowers can be highly profitable in good times, but it can also lead to swift and painful drawdowns when economic activity slows.

Capital One's dividend has a long history of getting cut during difficult periods, and the payout is likely to be cut when you need it most, during periods of economic weakness.

The dividend yield is a tiny 1.6%, making it hardly an income stock.

It requires a strong stomach to ride the peaks and valleys of Capital One's stock, as the bad times tend to hurt more here than they do at other banks.

The return on investment for Capital One Financial's stock has been nothing short of remarkable, with a 2,600% increase since it went public in late 1994.

Capital One Financial's stock has the potential to be a key element in a millionaire-making portfolio over the long term, given its impressive performance.

Its stock price has seen a significant rise, making it an attractive option for investors looking for substantial returns.

However, this level of performance comes with a warning: big rewards often mean big risks.

Big risks are a reality when investing in companies like Capital One, which has a history of taking on higher-risk borrowers. This approach can be highly profitable in good times, but it's not without its downsides.

The S&P 500 index is near all-time highs right now, which might make you think Capital One's aggressive business approach is a winner. However, drawdowns can be swift and painful when economic uncertainty rises.

Drawdowns happen fairly regularly at Capital One, and they can be a real gut-check for investors. The chart below highlights just how quickly investors can dump the stock when economic uncertainty rises.

The dividend yield at Capital One is a tiny 1.6%, hardly an income stock. This means the dividend payment is likely to be cut right when you most need it, during periods of economic weakness.

If you're considering buying Capital One, you might want to hold off on it for now.

Buying Capital One today with the stock about 18% below its all-time highs could mean paying full fare.

A 40% drawdown is a common occurrence, and that level might represent a better buying point.

You'll need to be a more aggressive investor with a long-term focus to take on the risk.

Discover Financial Services and Capital One Financial Corporation are tied for the Earnings Estimate Revisions Grade Winner.

Both companies have a grade of B, which indicates a positive earnings estimate revision score. This means that analysts are expecting continued sales growth for both companies.

Discover Financial Services has an Earnings Estimate Score of 80, which is a significant positive score. Capital One Financial Corporation has a score of 68, which is also positive.

If you're evaluating these companies based solely on their estimate revisions, you'll need to consider other financial metrics to determine which one is a better fit.

Discover Financial Services and Capital One Financial Corporation are both strong contenders in the financial services sector, but they have some notable differences. Discover Financial Services had a $48.8 billion market capitalization as of February 21, 2025, compared to the Consumer Finance median of $1.2 million.

Both companies have seen significant growth in their stock prices, with Discover Financial Services up 12.2% in 2025 and Capital One Financial Corporation up 12.3% in the same period. However, Capital One Financial Corporation's price-earnings ratio is 17.3, which is higher than Discover Financial Services' 11.0.

Their A+ Investor Value Grades are also worth considering, with both companies receiving a B grade. This suggests that they are both considered to be of good value, but not necessarily deep value.

Capital One Financial has a Relative Strength Rating of 92, indicating strong technical performance. This is a significant upgrade from previous ratings.

The company's Relative Strength Rating was upgraded on November 6, 2024, showing improving technical performance. This upgrade is a positive sign for investors.

Capital One Financial has cleared a key benchmark, hitting an 80-plus RS rating. This achievement demonstrates the company's solid performance.

Here are some key points to consider:

Capital One Financial's strong technical performance is a notable aspect of its recent upgrade. This could be a good time to consider the company as a potential investment opportunity.

Stock Value Grades are an important consideration for stock selection, as buying stocks that are going to go up typically means buying stocks that are undervalued in the first place.

Discover Financial Services and Capital One Financial Corporation both have a Value Grade of B, indicating they are a good value, but not deep value.

To determine a stock's Value Grade, AAII's A+ Investor uses a Value Score, which is the percentile rank of the average of the percentile ranks of six valuation ratios.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are a good value, and those with a score between 1 and 60 are not a value.

Discover Financial Services has a Value Score of 63, which is Value, and Capital One Financial Corporation has a Value Score of 67, which is also Value.

Here's a comparison of the two stocks' Value Scores:

Both stocks have a similar Value Score, indicating they are both undervalued to some extent.

Discover Financial Services and Capital One Financial Corporation have earned a B grade in their earnings estimate revisions. This score is based on the statistical significance of their last two quarterly earnings surprises and the percentage change in their consensus estimate for the current fiscal year.

The Earnings Estimate Revisions Score for Discover Financial Services is 80, which is classified as Positive. This score is a result of their recent earnings surprises, which have likely influenced analysts' expectations for the company's short-term prospects.

Capital One Financial Corporation also has a Positive Earnings Estimate Score of 68, which is a similar outcome to Discover Financial Services. Both companies have shown a positive trend in their earnings estimate revisions, indicating that analysts are optimistic about their future performance.

Here's a comparison of the two companies' Earnings Estimate Revisions Scores:

Both companies have a B grade in their earnings estimate revisions, making it a tie in this category. To determine which company is a better fit, other financial metrics will need to be evaluated.

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Their team of experts has extensive knowledge of the financial markets, allowing them to make informed investment decisions on your behalf.

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Discover Financial Services and Capital One Financial Corporation are both considered good value stocks, with Value Scores of 63 and 67 respectively. They both have a Value Grade of B.

Their momentum scores are also very strong, with Discover Financial Services having a Momentum Score of 84 and Capital One Financial Corporation having a Momentum Score of 81.

If you're looking for stocks with strong momentum, both of these companies are worth considering. However, if you're focusing solely on valuation, you may need to conduct further research to determine which one is the best fit for your portfolio.

Here's a comparison of their momentum scores:

Discover Financial Services is a company that's been doing well in the market, with a market capitalization of $48.8 billion as of February 21, 2025. This is significantly higher than the median of Consumer Finance at $1.2 million.

Their stock has been up 12.2% in 2025, and 56.2% in the past year, which is impressive. This growth is reflected in their price-earnings ratio, which is 11.0.

Discover Financial Services has a strong revenue growth, with a trailing 12-month revenue of $16.0 billion and a 28.4% net profit margin. Their year-over-year quarterly sales growth is also impressive, at 90.0%.

Analysts expect adjusted earnings to reach $13.683 per share for the current fiscal year, and the company currently has a 1.4% dividend yield.

Here's a comparison of Discover Financial Services' stock grades with Capital One Financial Corporation:

Both companies have a strong momentum, with Discover Financial Services having a Momentum Score of 84, which is Very Strong, and Capital One Financial Corporation having a Momentum Score of 81, which is also Very Strong.

Investment fees can eat into your returns, but Capital One Investing offers low-cost options. The management expense ratio for their index funds is as low as 0.04%, significantly lower than the industry average.

This means you get to keep more of your hard-earned money, rather than paying it out in unnecessary fees. With lower fees, you can invest more and reach your financial goals faster.

Capital One Investing also offers commission-free trading for many of their investment products, eliminating another common fee.

Investing in the stock market can be a great way to grow your wealth, but it's essential to understand the fees associated with trading. For instance, Capital One users pay a base-plus commission for each options trade.

The standard commission schedule for Capital One users is a flat price per trade, plus $0.75 for each option contract traded. This means that for stock options, you'll pay $6.95 per trade plus $0.75 per contract.

A trade involving a single stock or ETF, on the other hand, costs $6.95 per trade.

Capital One doesn't currently offer multi-leg options trades, making it less suitable for investors who trade multiple contracts at once.

This can be a drawback for sophisticated traders who use strategies involving multiple puts and call contracts.

The fees for exercise and assignment are $30 for early exercise and $20 if automatically exercised at expiration, and $20 for assignment.

Early exercise can be a costly option, with a fee of $30.

A simultaneous order to buy one put and one call would only incur one base rate charge at some brokers, but not at Capital One.

Here's a breakdown of the fees for multi-leg options trading at Capital One:

It's worth noting that some brokers waive fees to buy-to-close options priced at $0.10 or less for free, but Capital One does not.

To start trading with Capital One Investing, you'll need to meet certain requirements. The minimum balance requirement for a trading account is $1,000.

You can open a trading account with as little as $100, but you'll need to fund your account with at least $1,000 to start trading. This is a one-time requirement, not a recurring one.

The trading platform is available online or through the Capital One mobile app. You can access your account, view market data, and place trades from anywhere with an internet connection.

Each trade has a $4.95 commission fee, which is a flat rate regardless of the trade size. This fee is in addition to any other fees associated with your account.

Capital One Investing offers a variety of investment options, including stocks, ETFs, options, and mutual funds. You can choose from thousands of individual stocks and ETFs, or opt for a diversified portfolio with a mutual fund.

Stock options trading with Capital One can be a good fit for investors who engage in simple options trades or use options sparingly. Capital One's prices and features are geared towards attracting these types of investors.

Its $3.95 trades for buy-and-hold investors are a notable feature, but they're more suited for stock investors rather than options users. This suggests that Capital One may not be the best choice for more complicated trading strategies.

Investors who use multi-leg trading or buy-to-cover options may find Capital One's platform lacking in features. The lack of discounts for low-priced contracts also makes it less appealing for these types of traders.