Discover Financial Services
Market Cap
US$17.5b
Last Updated
2020/06/04 03:26 UTC
Data Sources
Company Financials +
Executive Summary
Discover Financial Services, through its subsidiaries, operates as a direct banking and payment services company in the United States.
Rewards
Risk Analysis
Snowflake Analysis
Established dividend payer with moderate growth potential.
Similar Companies
Share Price & News
How has Discover Financial Services's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: DFS's share price has been volatile over the past 3 months.
Market Performance
7 Day Return
15.5%
DFS
2.0%
US Consumer Finance
2.4%
US Market
1 Year Return
-26.8%
DFS
-24.0%
US Consumer Finance
9.2%
US Market
Return vs Industry: DFS underperformed the US Consumer Finance industry which returned -24% over the past year.
Return vs Market: DFS underperformed the US Market which returned 9.2% over the past year.
Shareholder returns
| DFS | Industry | Market | |
|---|---|---|---|
| 7 Day | 15.5% | 2.0% | 2.4% |
| 30 Day | 39.0% | 17.1% | 10.2% |
| 90 Day | -8.7% | -14.6% | 3.4% |
| 1 Year | -24.8%-26.8% | -22.4%-24.0% | 11.6%9.2% |
| 3 Year | 2.5%-4.3% | 10.6%5.0% | 33.7%24.9% |
| 5 Year | 7.8%-3.5% | 4.3%-3.9% | 59.7%41.8% |
Price Volatility Vs. Market
How volatile is Discover Financial Services's share price compared to the market and industry in the last 5 years?
Simply Wall St News
10 hours ago | Simply Wall St
A Rising Share Price Has Us Looking Closely At Discover Financial Services's (NYSE:DFS) P/E Ratio2 days ago | Simply Wall St
Does Discover Financial Services (NYSE:DFS) Have A Place In Your Dividend Portfolio?2 weeks ago | Simply Wall St
Here's What We Like About Discover Financial Services's (NYSE:DFS) Upcoming DividendValuation
Is Discover Financial Services undervalued compared to its fair value and its price relative to the market?
8.47x
Price to Earnings (PE) ratio
Share Price vs. Fair Value
Below Fair Value: DFS ($57.14) is trading above our estimate of fair value ($46.81)
Significantly Below Fair Value: DFS is trading above our estimate of fair value.
Price To Earnings Ratio
PE vs Industry: DFS is poor value based on its PE Ratio (8.5x) compared to the Consumer Finance industry average (6.5x).
PE vs Market: DFS is good value based on its PE Ratio (8.5x) compared to the US market (16.1x).
Price to Earnings Growth Ratio
PEG Ratio: DFS is good value based on its PEG Ratio (0.2x)
Price to Book Ratio
PB vs Industry: DFS is overvalued based on its PB Ratio (1.9x) compared to the US Consumer Finance industry average (0.9x).
Next Steps
Future Growth
How is Discover Financial Services forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?
51.3%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: DFS's forecast earnings growth (51.3% per year) is above the savings rate (2.2%).
Earnings vs Market: DFS's earnings (51.3% per year) are forecast to grow faster than the US market (22.2% per year).
High Growth Earnings: earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: DFS's revenue (4% per year) is forecast to grow slower than the US market (8.8% per year).
High Growth Revenue: DFS's revenue (4% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: DFS's Return on Equity is forecast to be low in 3 years time (19.7%).
Next Steps
Past Performance
How has Discover Financial Services performed over the past 5 years?
4.5%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: DFS has high quality earnings.
Growing Profit Margin: DFS's current net profit margins (28.9%) are lower than last year (35.2%).
Past Earnings Growth Analysis
Earnings Trend: DFS's earnings have grown by 4.5% per year over the past 5 years.
Accelerating Growth: DFS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: DFS had negative earnings growth (-22.7%) over the past year, making it difficult to compare to the Consumer Finance industry average (-22.1%).
Return on Equity
High ROE: Whilst DFS's Return on Equity (22.45%) is high, this metric is skewed due to their high level of debt.
Next Steps
Financial Health
How is Discover Financial Services's financial position?
Financial Position Analysis
Short Term Liabilities: DFS's short term assets ($98.3B) exceed its short term liabilities ($81.6B).
Long Term Liabilities: DFS's short term assets ($98.3B) exceed its long term liabilities ($21.4B).
Debt to Equity History and Analysis
Debt Level: DFS's debt to equity ratio (270.1%) is considered high.
Reducing Debt: DFS's debt to equity ratio has increased from 206.6% to 270.1% over the past 5 years.
Debt Coverage: DFS's debt is well covered by operating cash flow (21.2%).
Interest Coverage: Insufficient data to determine if DFS's interest payments on its debt are well covered by EBIT.
Balance Sheet
Next Steps
Dividend
What is Discover Financial Services's current dividend yield, its reliability and sustainability?
3.08%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: DFS's dividend (3.08%) is higher than the bottom 25% of dividend payers in the US market (1.65%).
High Dividend: DFS's dividend (3.08%) is low compared to the top 25% of dividend payers in the US market (4.39%).
Stability and Growth of Payments
Stable Dividend: DFS's dividends per share have been stable in the past 10 years.
Growing Dividend: DFS's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonably low payout ratio (25.5%), DFS's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: DFS's dividends in 3 years are forecast to be well covered by earnings (25.9% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
1.8yrs
Average management tenure
CEO
Roger Hochschild (54yo)
1.67yrs
Tenure
US$9,250,436
Compensation
Mr. Roger Crosby Hochschild serves as the President and Chief Executive Officer for Discover Financial Services Since 1st October, 2018 and serves as Chief Executive Officer and President at Discover Bank ...
CEO Compensation Analysis
Compensation vs Market: Roger's total compensation ($USD9.25M) is about average for companies of similar size in the US market ($USD11.58M).
Compensation vs Earnings: Roger's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO, President & Director | 1.67yrs | US$9.25m | 0.11% $18.5m | |
| Executive VP & CFO | 0.75yr | US$1.93m | 0.0014% $253.8k | |
| Executive VP | 0.92yr | US$10.40m | 0.0011% $194.3k | |
| Executive VP & President of Payment Services | 10.17yrs | US$3.88m | 0.038% $6.7m | |
| Executive VP & President of US Cards | 4.5yrs | US$3.88m | 0.015% $2.7m | |
| Chief Accounting Officer | 7.5yrs | no data | 0.0046% $810.3k | |
| Executive VP & Chief Information Officer | 0.25yr | no data | 0.0060% $1.1m | |
| Executive VP and Chief HR & Administrative Officer | 1.75yrs | no data | 0.011% $1.9m | |
| Vice President of Investor Relations | no data | no data | no data | |
| Vice President of Corporate Communications | 7.33yrs | no data | no data |
1.8yrs
Average Tenure
54yo
Average Age
Experienced Management: DFS's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO, President & Director | 1.67yrs | US$9.25m | 0.11% $18.5m | |
| Independent Director | 13yrs | US$279.99k | 0.019% $3.3m | |
| Independent Director | 4.42yrs | US$274.99k | 0.0031% $539.1k | |
| Independent Director | 13yrs | US$264.99k | 0.023% $4.1m | |
| Independent Director | 7.17yrs | US$264.99k | 0.0065% $1.1m | |
| Independent Chairman | 0.083yr | US$274.99k | 0.019% $3.2m | |
| Independent Director | 13yrs | US$279.99k | 0.023% $4.1m | |
| Independent Director | 12.75yrs | US$284.99k | 0.018% $3.1m | |
| Independent Director | 11.33yrs | US$284.99k | 0.015% $2.6m | |
| Independent Director | 6.08yrs | US$279.99k | 0.0055% $966.1k |
9.3yrs
Average Tenure
57.5yo
Average Age
Experienced Board: DFS's board of directors are considered experienced (9.3 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: DFS insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Discover Financial Services's company bio, employee growth, exchange listings and data sources
Key Information
- Name: Discover Financial Services
- Ticker: DFS
- Exchange: NYSE
- Founded: 1986
- Industry: Consumer Finance
- Sector: Diversified Financials
- Market Cap: US$17.502b
- Shares outstanding: 306.30m
- Website: https://www.discover.com
Number of Employees
Location
- Discover Financial Services
- 2500 Lake Cook Road
- Riverwoods
- Illinois
- 60015
- United States
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| DFS | NYSE (New York Stock Exchange) | Yes | Common Stock | US | USD | Jun 2007 |
| DC7 | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Jun 2007 |
| 0IBC | LSE (London Stock Exchange) | Yes | Common Stock | GB | USD | Jun 2007 |
| DFS * | BMV (Bolsa Mexicana de Valores) | Yes | Common Stock | MX | MXN | Jun 2007 |
| D1FS34 | BOVESPA (Bolsa de Valores de Sao Paulo) | BDR EACH 2 REPR 1 SHS UNSPON | BR | BRL | Jan 2020 |
Biography
Discover Financial Services, through its subsidiaries, operates as a direct banking and payment services company in the United States. The Direct Banking segment offers Discover-branded credit cards to individuals; and other consumer products and services, including private student loans, personal loans, home equity loans, and other consumer lending, as well as deposit products, such as certificates of deposit, money market accounts, savings accounts, checking accounts, and individual retirement arrangement certificates of deposit. The Payment Services segment operates the PULSE network, an automated teller machine, debit, and electronic funds transfer network; Diners Club International, a payments network that issues Diners Club branded charge cards and provides card acceptance services; and Discover Network that processes transactions for Discover-branded credit and debit cards, as well as provides payment transaction processing and settlement services. The company was incorporated in 1986 and is based in Riverwoods, Illinois.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/06/04 03:26 |
| End of Day Share Price | 2020/06/03 00:00 |
| Earnings | 2020/03/31 |
| Annual Earnings | 2019/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.