Earlier this year, Warren Buffett invested in Capital One Financial (NYSE: COF) for the first time and cut back on other bank stocks, like US Bancorp. The move may have taken some by surprise as the bank -- the ninth largest in the country with some $469 billion in assets -- has been a spotty performer over the years. 

Over the last 20 years it has posted an annualized return of about 3.6%, and over the past 10 years, the annualized return is just 4.6%. Both of these numbers trail the S 500. 

However, during the past three years, Capital One has doubled the large-cap benchmark index, posting an annual return of 17.2%. As one of the largest credit card issuers, Capital One has benefited in recent years from a pandemic-led surge in digital spending, and it should continue to take advantage of the gradual shift to digital payments. It is also dirt cheap, with a price-to-earnings ratio of less than 8 while trading with a price-to-book ratio of just 0.73. Maybe those factors appealed to Buffett, the chairman and chief executive officer of Berkshire Hathaway. 

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Source Fool.com