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DFS

Discover Financial ServicesNYSE:DFS Stock Report

Last Price

US$114.45

Market Cap

US$33.0b

7D

-10.3%

1Y

24.0%

Updated

21 Jan, 2022

Data

Company Financials +
DFS fundamental analysis
Snowflake Score
Valuation4/6
Future Growth1/6
Past Performance5/6
Financial Health5/6
Dividends5/6

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

American Express

NYSE:AXP

US$123.0b

Capital One Financial

NYSE:COF

US$62.4b

Synchrony Financial

NYSE:SYF

US$24.3b

Credit Acceptance

NasdaqGS:CACC

US$8.2b

Price History & Performance

Summary of all time highs, changes and price drops for Discover Financial Services
Historical stock prices
Current Share PriceUS$114.45
52 Week HighUS$135.69
52 Week LowUS$81.27
Beta1.69
1 Month Change-0.36%
3 Month Change-8.57%
1 Year Change24.04%
3 Year Change71.51%
5 Year Change65.73%
Change since IPO298.09%

Recent News & Updates

Dec 09
Is Now The Time To Put Discover Financial Services (NYSE:DFS) On Your Watchlist?

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...

Nov 03

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.

Oct 28

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

DFSUS Consumer FinanceUS Market
7D-10.3%-6.3%-4.0%
1Y24.0%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

Is DFS's price volatile compared to industry and market?
DFS volatility
DFS Average Weekly Movement4.7%
Consumer Finance Industry Average Movement8.0%
Market Average Movement6.6%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.4%

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

FoundedEmployeesCEOWebsite
196017,600Roger Hochschildhttps://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

How do Discover Financial Services's earnings and revenue compare to its market cap?
DFS fundamental statistics
Market CapUS$32.96b
Earnings (TTM)US$5.35b
Revenue (TTM)US$14.38b

6.2x

P/E Ratio

2.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
DFS income statement (TTM)
RevenueUS$14.38b
Cost of RevenueUS$3.01b
Gross ProfitUS$11.37b
ExpensesUS$6.02b
EarningsUS$5.35b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)18.58
Gross Margin79.07%
Net Profit Margin37.22%
Debt/Equity Ratio150.9%

How did DFS perform over the long term?

See historical performance and comparison

Dividends

1.7%

Current Dividend Yield

11%

Payout Ratio

Does DFS pay a reliable dividends?

See DFS dividend history and benchmarks
When do you need to buy DFS by to receive an upcoming dividend?
Discover Financial Services dividend dates
Ex Dividend DateFeb 16 2022
Dividend Pay DateMar 03 2022
Days until Ex dividend25 days
Days until Dividend pay date40 days

Does DFS pay a reliable dividends?

See DFS dividend history and benchmarks

Valuation

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

TodayJan 22 2022Ex Dividend DateFeb 16 2022Dividend Pay DateMar 03 202215 days from Ex DividendBuy in the next 25 days to receive the upcoming dividend

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

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/21 23:44
End of Day Share Price2022/01/21 00:00
Earnings2021/12/31
Annual Earnings2021/12/31


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.