Jim Cramer is bullish on Capital One buying Discover Financial

Famed investor Jim Cramer is bullish on Capital One Financial Corp (NYSE: COF) spending over $35 billion to buy Discover Financial Services (NYSE: DFS).

Cramer shares view on $COF - $DFS deal

The all-stock deal announced today values each share of Discover Financial at about $139.

Shares of Capital One opened significantly in the red this morning following the $DFS news. But the Mad Money host said today on CNBC’s “Squawk on the Street”:

In January, Capital One said its revenue came in ahead of Street estimates in the fourth financial quarter. $COF has gained more than 50% over the past four months.

Capital One is a dividend stock as well

Jim Cramer is positive on Capital One Financial Corp also because it has “changed its model” to go “head-to-head with JPMorgan and American Express”.

The bank holding company based out of McLean, Virginia will keep the Discover brand following the merger that is expected to close by the final quarter of this year or the first quarter of 2025.

All in all, the Mad Money host is convinced that Richard Fairbank – the chief executive of Capital One can build one an “unrivaled” payments network within Discover Financial.

$COF currently pays a dividend yield of 1.74% which makes up for another good reason to have it in an investment portfolio.