Discover Financial Services
Market Cap
US$35.2b
Last Updated
2021/05/05 22:19 UTC
Data Sources
Company Financials +
Executive Summary
Discover Financial Services, through its subsidiaries, operates as a digital banking and payment services company in the United States. More Details
Rewards
Risk Analysis
Earnings are forecast to decline by an average of 10% per year for the next 3 years
Snowflake Analysis
Established dividend payer with adequate balance sheet.
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 is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: DFS's weekly volatility (4%) has been stable over the past year.
Market Performance
7 Day Return
4.3%
DFS
1.5%
US Consumer Finance
-1.6%
US Market
1 Year Return
197.1%
DFS
117.9%
US Consumer Finance
52.8%
US Market
Return vs Industry: DFS exceeded the US Consumer Finance industry which returned 108.3% over the past year.
Return vs Market: DFS exceeded the US Market which returned 52.4% over the past year.
Shareholder returns
| DFS | Industry | Market | |
|---|---|---|---|
| 7 Day | 4.3% | 1.5% | -1.6% |
| 30 Day | 17.6% | 5.3% | 1.3% |
| 90 Day | 27.1% | 16.7% | 3.5% |
| 1 Year | 206.1%197.1% | 122.5%117.9% | 55.4%52.8% |
| 3 Year | 68.7%56.9% | 52.1%44.0% | 63.5%53.2% |
| 5 Year | 134.0%110.0% | 137.9%117.1% | 125.8%100.7% |
Long-Term 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
1 week ago | Simply Wall St
Daniel Capozzi Is The Executive VP & President of US Cards of Discover Financial Services (NYSE:DFS) And They Just Sold 27% Of Their Shares3 weeks ago | Simply Wall St
What Kind Of Shareholders Own Discover Financial Services (NYSE:DFS)?2 months ago | Simply Wall St
Is Discover Financial Services's (NYSE:DFS) 1.8% Dividend Worth Your Time?Valuation
Is Discover Financial Services undervalued compared to its fair value and its price relative to the market?
39.6%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: DFS ($116.27) is trading below our estimate of fair value ($192.38)
Significantly Below Fair Value: DFS is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: DFS is poor value based on its PE Ratio (13.1x) compared to the US Consumer Finance industry average (8.9x).
PE vs Market: DFS is good value based on its PE Ratio (13.1x) compared to the US market (20.6x).
Price to Earnings Growth Ratio
PEG Ratio: DFS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.
Price to Book Ratio
PB vs Industry: DFS is overvalued based on its PB Ratio (3.2x) compared to the US Consumer Finance industry average (1.6x).
Future Growth
How is Discover Financial Services forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?
-10.0%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: DFS's earnings are forecast to decline over the next 3 years (-10% per year).
Earnings vs Market: DFS's earnings are forecast to decline over the next 3 years (-10% per year).
High Growth Earnings: DFS's earnings are forecast to decline over the next 3 years.
Revenue vs Market: DFS's revenue (5.9% per year) is forecast to grow slower than the US market (9.3% per year).
High Growth Revenue: DFS's revenue (5.9% 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 high in 3 years time (24.8%)
Past Performance
How has Discover Financial Services performed over the past 5 years?
-3.7%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: DFS has high quality earnings.
Growing Profit Margin: DFS's current net profit margins (34%) are higher than last year (28.9%).
Past Earnings Growth Analysis
Earnings Trend: DFS's earnings have declined by 3.7% per year over the past 5 years.
Accelerating Growth: DFS's earnings growth over the past year (28.4%) exceeds its 5-year average (-3.7% per year).
Earnings vs Industry: DFS earnings growth over the past year (28.4%) underperformed the Consumer Finance industry 40.1%.
Return on Equity
High ROE: Whilst DFS's Return on Equity (23%) is high, this metric is skewed due to their high level of debt.
Financial Health
How is Discover Financial Services's financial position?
Financial Position Analysis
Short Term Liabilities: DFS's short term assets ($100.6B) exceed its short term liabilities ($84.8B).
Long Term Liabilities: DFS's short term assets ($100.6B) exceed its long term liabilities ($16.9B).
Debt to Equity History and Analysis
Debt Level: DFS's debt to equity ratio (172.2%) is considered high.
Reducing Debt: DFS's debt to equity ratio has reduced from 219.4% to 172.2% over the past 5 years.
Debt Coverage: DFS's debt is well covered by operating cash flow (28.8%).
Interest Coverage: Insufficient data to determine if DFS's interest payments on its debt are well covered by EBIT.
Balance Sheet
Dividend
What is Discover Financial Services's current dividend yield, its reliability and sustainability?
1.51%
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: DFS's dividend (1.51%) is higher than the bottom 25% of dividend payers in the US market (1.24%).
High Dividend: DFS's dividend (1.51%) is low compared to the top 25% of dividend payers in the US market (3.42%).
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 low payout ratio (19.8%), 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 (17.1% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
2.6yrs
Average management tenure
CEO
Roger Hochschild (55 yo)
2.58yrs
Tenure
US$10,357,259
Compensation
Mr. Roger Crosby Hochschild serves Chief Executive Officer for Discover Financial Services since October 1, 2018 has been its President since March 2004 and also serves as its Member of Board of Directors ...
CEO Compensation Analysis
Compensation vs Market: Roger's total compensation ($USD10.36M) is about average for companies of similar size in the US market ($USD11.13M).
Compensation vs Earnings: Roger's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: DFS's management team is considered experienced (2.6 years average tenure).
Board Members
Experienced Board: DFS's board of directors are considered experienced (7.5 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: DFS insiders have only sold shares 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: 1960
- Industry: Consumer Finance
- Sector: Diversified Financials
- Market Cap: US$35.190b
- Shares outstanding: 304.89m
- Website: https://www.discover.com
Number of Employees
Location
- Discover Financial Services
- 2500 Lake Cook Road
- Riverwoods
- Illinois
- 60015
- United States
Listings
Biography
Discover Financial Services, through its subsidiaries, operates as a digital banking and payment services company in the United States. It operates in two segments, Digital Banking and Payment Services. Th...
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/05/05 22:19 |
| End of Day Share Price | 2021/05/05 00:00 |
| Earnings | 2021/03/31 |
| Annual Earnings | 2020/12/31 |
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.