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Capital One: Is it a good pick for your portfolio?


Mar. 5 2015, Updated 10:25 a.m. ET

Different banks follow different growth paths

Not all banks follow the same growth path. Some banks start as savings banks. They grow their network and then get into other financial products. Examples of such banks are Wells Fargo (WFC), U.S. Bank (USB), and PNC Bank (PNC). All of these banks are part of the Financial Select Sector SPFR (XLF).

Others banks start out primarily as investment banks and then move in as savings banks. However, there’s one bank that chartered a very different path. That bank is Capital One.

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Capital One is a large diversified bank 

Capital One (COF) is one of the largest banks in the US. The bank offers an array of financial products and services to its customers. These products are offered through a combination of branches. Capital Bank started as a credit card bank. The bank grew to become one of the biggest and most respected credit card providers. Later, it ventured into loans and deposits. The diversification in the product line was done in phases over a number of years.

The bank has also been one of the best performing banks after the subprime period. It has a good dividend paying track record. So, is this a good stock to own?

In this series, we’ll look at Capital One in more detail. We’ll analyze the bank from the financial and strategic perspectives. We’ll also keep a keen eye on how the bank evolved over the years. The bank took a calibrated approach to growth. It grew organically and inorganically.


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