Capital One Rolls With the Punches

Just a few short years ago, Capital One Financial (NYSE: COF) was a small, fast-growing credit card company. Now it’s a diversified financial services company offering everything from credit cards to auto loans to home loans.

From 1994 to 2003, the company was able to grow both earnings per share and total customers by a compounded annual rate of 28%. And from 2000 through 2003, Capital One’s share of the U.S. credit card market grew from 3.3% to 7.2%. The question is, does Capital One have an earnings encore in the works?

What separates Capital One from its competitors is its information-based strategy (“IBS”). IBS combines one of the world’s largest databases with an army of statisticians and financial analysts. Through the use of advanced statistics and rigorous testing, IBS allows Capital One to cherry-pick the most profitable customers and charge them based on their risk profile.

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