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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


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

DFSIndustryMarket
7 Day4.3%1.5%-1.6%
30 Day17.6%5.3%1.3%
90 Day27.1%16.7%3.5%
1 Year206.1%197.1%122.5%117.9%55.4%52.8%
3 Year68.7%56.9%52.1%44.0%63.5%53.2%
5 Year134.0%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

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

TodayMay 06 2021Ex Dividend DateMay 19 2021Dividend Pay DateJun 03 202115 days from Ex DividendBuy in the next 13 days to receive the upcoming dividend

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

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/05/05 22:19
End of Day Share Price2021/05/05 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


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.