| Snowflake Score | |
|---|---|
| Valuation | 4/6 |
| Future Growth | 1/6 |
| Past Performance | 5/6 |
| Financial Health | 5/6 |
| Dividends | 5/6 |
DFS Stock Overview
Discover Financial Services, through its subsidiaries, operates as a digital banking and payment services company in the United States.
Discover Financial Services Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$114.45 |
| 52 Week High | US$135.69 |
| 52 Week Low | US$81.27 |
| Beta | 1.69 |
| 1 Month Change | -0.36% |
| 3 Month Change | -8.57% |
| 1 Year Change | 24.04% |
| 3 Year Change | 71.51% |
| 5 Year Change | 65.73% |
| Change since IPO | 298.09% |
Recent News & Updates
Is Now The Time To Put Discover Financial Services (NYSE:DFS) On Your Watchlist?
It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...
Discover Financial Services: A High-Margin Business Model But Trading At Expensive Levels
Unlike a typical banking business, Discover Financial Services derives a majority of its income from credit card lending, which is good for us. While Discover’s capital position is quite healthy to withstand any short-term fall in profits from a rise in provisions, the actual impact from the Covid-19 pandemic remains to be seen. However, the current price levels are too high when compared with the intrinsic value, leaving very little room for investors to realize considerable profits.
Buy The Drop On Discover Financial Services
Discover Financial Services has demonstrated a solid track record of growth, and is seeing a record low net charge-off rate. It pays a very well-covered and growing dividend, and share buybacks contribute to the total return story. The recent material drop in share price presents a buying opportunity.
Shareholder Returns
| DFS | US Consumer Finance | US Market | |
|---|---|---|---|
| 7D | -10.3% | -6.3% | -4.0% |
| 1Y | 24.0% | 10.0% | 6.6% |
Return vs Industry: DFS exceeded the US Consumer Finance industry which returned 10% over the past year.
Return vs Market: DFS exceeded the US Market which returned 6.6% over the past year.
Price Volatility
| DFS volatility | |
|---|---|
| DFS Average Weekly Movement | 4.7% |
| Consumer Finance Industry Average Movement | 8.0% |
| Market Average Movement | 6.6% |
| 10% most volatile stocks in US Market | 15.7% |
| 10% least volatile stocks in US Market | 2.4% |
Stable Share Price: DFS is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: DFS's weekly volatility (5%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1960 | 17,600 | Roger Hochschild | https://www.discover.com |
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. The Digital Banking segment offers Discover-branded credit cards to individuals; and other consumer products and services, including private student loans, personal loans, home loans, and other consumer lending, as well as deposit products, such as certificates of deposit, money market accounts, IRA certificates of deposit, IRA savings accounts, checking accounts, and sweep accounts.
Discover Financial Services Fundamentals Summary
| DFS fundamental statistics | |
|---|---|
| Market Cap | US$32.96b |
| Earnings (TTM) | US$5.35b |
| Revenue (TTM) | US$14.38b |
6.2x
P/E Ratio2.3x
P/S RatioIs DFS overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| DFS income statement (TTM) | |
|---|---|
| Revenue | US$14.38b |
| Cost of Revenue | US$3.01b |
| Gross Profit | US$11.37b |
| Expenses | US$6.02b |
| Earnings | US$5.35b |
Last Reported Earnings
Dec 31, 2021
Next Earnings Date
n/a
| Earnings per share (EPS) | 18.58 |
| Gross Margin | 79.07% |
| Net Profit Margin | 37.22% |
| Debt/Equity Ratio | 150.9% |
How did DFS perform over the long term?
See historical performance and comparisonDividends
1.7%
Current Dividend Yield11%
Payout RatioDoes DFS pay a reliable dividends?
See DFS dividend history and benchmarks| Discover Financial Services dividend dates | |
|---|---|
| Ex Dividend Date | Feb 16 2022 |
| Dividend Pay Date | Mar 03 2022 |
| Days until Ex dividend | 25 days |
| Days until Dividend pay date | 40 days |
Does DFS pay a reliable dividends?
See DFS dividend history and benchmarksValuation
Is Discover Financial Services undervalued compared to its fair value and its price relative to the market?
>50%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: DFS ($114.45) is trading below our estimate of fair value ($256.23)
Significantly Below Fair Value: DFS is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: DFS is good value based on its PE Ratio (6.2x) compared to the US Consumer Finance industry average (6.5x).
PE vs Market: DFS is good value based on its PE Ratio (6.2x) compared to the US market (16.7x).
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 (2.5x) compared to the US Consumer Finance industry average (1.5x).
Future Growth
How is Discover Financial Services forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?
-18.0%
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 (-18% per year).
Earnings vs Market: DFS's earnings are forecast to decline over the next 3 years (-18% per year).
High Growth Earnings: DFS's earnings are forecast to decline over the next 3 years.
Revenue vs Market: DFS's revenue is expected to decline over the next 3 years (-3.7% per year).
High Growth Revenue: DFS's revenue is forecast to decline over the next 3 years (-3.7% 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 (32.8%)
Past Performance
How has Discover Financial Services performed over the past 5 years?
12.3%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: DFS has high quality earnings.
Growing Profit Margin: DFS's current net profit margins (37.2%) are higher than last year (18.5%).
Past Earnings Growth Analysis
Earnings Trend: DFS's earnings have grown by 12.3% per year over the past 5 years.
Accelerating Growth: DFS's earnings growth over the past year (384.7%) exceeds its 5-year average (12.3% per year).
Earnings vs Industry: DFS earnings growth over the past year (384.7%) exceeded the Consumer Finance industry 122.5%.
Return on Equity
High ROE: Whilst DFS's Return on Equity (40.64%) is outstanding, 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 ($105.1B) exceed its short term liabilities ($77.9B).
Long Term Liabilities: DFS's short term assets ($105.1B) exceed its long term liabilities ($19.0B).
Debt to Equity History and Analysis
Debt Level: DFS's net debt to equity ratio (14.8%) is considered satisfactory.
Reducing Debt: DFS's debt to equity ratio has reduced from 225.6% to 150.9% over the past 5 years.
Debt Coverage: DFS's debt is well covered by operating cash flow (31.2%).
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?
1.75%
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: DFS's dividend (1.75%) is higher than the bottom 25% of dividend payers in the US market (1.36%).
High Dividend: DFS's dividend (1.75%) is low compared to the top 25% of dividend payers in the US market (3.55%).
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 (10.5%), DFS's dividend payments are thoroughly covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: DFS's dividends in 3 years are forecast to be thoroughly covered by earnings (12.3% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
4.6yrs
Average management tenure
CEO
Roger Hochschild (56 yo)
17.83yrs
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 ($USD11.42M).
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 (4.6 years average tenure).
Board Members
Experienced Board: DFS's board of directors are seasoned and experienced ( 10.8 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 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
- Implied Market Cap: US$32.962b
- Shares outstanding: 288.00m
- Website: https://www.discover.com
Number of Employees
Location
- Discover Financial Services
- 2500 Lake Cook Road
- Riverwoods
- Illinois
- 60015
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/01/21 23:44 |
| End of Day Share Price | 2022/01/21 00:00 |
| Earnings | 2021/12/31 |
| Annual Earnings | 2021/12/31 |
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.