Before You Buy Capital One, Here's a Bank Stock I'd Buy First
Warren Buffett, chairman and chief executive officer of Berkshire Hathaway, made news when he added Capital One Financial to the company's portfolio. Buffett bought nearly 10 million shares; it was the company's first position in the bank.
Capital One is the ninth-largest bank in the country, with most of its revenue coming from its credit card business. Anytime Buffett adds a new position to his portfolio, it creates interest among investors. But if given a choice between Capital One and a similar stock, Discover Financial Services (NYSE: DFS), I'd buy Discover first. Here's why.
Capital One and Discover are similar in that they are both banks that generate significant income by issuing loans for credit card customers. But they are different in that Capital One is just an issuer, while Discover is an issuer and payment processor with its own closed loop network.
Source Fool.com
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