Discover Financial Services

NYSE:DFS Stock Report

Market Cap: US$50.3b

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

Discover Financial Services Dividends and Buybacks

Dividend criteria checks 4/6

Discover Financial Services is a dividend paying company with a current yield of 1.4% that is well covered by earnings. Next payment date is on 6th June, 2025 with an ex-dividend date of 23rd May, 2025.

Key information

1.4%

Dividend yield

0.1%

Buyback Yield

Total Shareholder Yield1.5%
Future Dividend Yield1.6%
Dividend Growth11.0%
Next dividend pay date06 Jun 25
Ex dividend date23 May 25
Dividend per sharen/a
Payout ratio15%

Recent dividend and buyback updates

Recent updates

Seeking Alpha May 19

The Capital One And Discover Merger Remains A Completely Overlooked Opportunity

Summary The Capital One Financial Corporation-Discover Financial Services merger creates a consumer credit powerhouse with unmatched scale, reach, and efficiency, positioning it for outsized shareholder returns. The combined company benefits from cost synergies, expanded data, and cross-selling opportunities, driving both margin growth and revenue upside. Capital One's acquisition of Discover's network reduces regulatory risk and offers flexibility against potential credit card legislation, unlike Visa and Mastercard. Despite cyclical risks in consumer credit, the new entity trades at a discount and offers a compelling entry point, making COF and DFS a strong buy. Read the full article on Seeking Alpha
Seeking Alpha Jan 20

Discover Financial: A Company With Too Many Balls In The Air

Summary Discover Financial's new CEO is navigating acquisition talks with Capital One amidst regulatory probes, making the stock a 'Sell'. Capital One's $35.3 billion all-stock acquisition aims to challenge Visa and Mastercard's duopoly in payment processing. The merger could either integrate Discover into Capital One or leave Discover shareholders with the existing business. Despite regulatory support, competing with Visa and Mastercard's entrenched market dominance poses significant challenges for Capital One. Read the full article on Seeking Alpha
Seeking Alpha Jan 08

Discover Financial: Strong Fundamentals And Strategic Outlook

Summary Discover Financial Services shows strong financial performance with a 41% increase in net income and a 42% rise in EPS, driven by higher interest margins. The planned merger with Capital One will create the largest U.S. credit card issuer, enhancing synergies and operational efficiencies and boosting the credit card and payment business. While the P/E ratio of 12.5 suggests a reasonable valuation with potential upside, cautious investors may wait as the stock’s P/B ratio of 2.8 indicates it is historically fully valued. Read the full article on Seeking Alpha
Seeking Alpha Oct 25

Discover Financial Services: Well-Positioned If The Acquisition Fails

Summary Discover Financial Services is a strong investment with a P/E of ~10, robust credit metrics, and a 2% dividend, even if the Capital One acquisition fails. The company's 3Q24 results show nearly $1 billion in net income, improved NIM, and manageable charge-offs despite a slight increase in delinquency rates. Discover's CET1 ratio of 12.7% and halted share repurchases provide a solid capital position, with the potential for increased shareholder returns if the acquisition fails. The main risk is potential antitrust issues blocking the acquisition, but Discover remains a valuable investment with substantial future shareholder returns. Read the full article on Seeking Alpha
Seeking Alpha Sep 24

Good Value Despite Discover's Stalled Merger

Summary Discover Financial Services enjoys consistent growth, and a healthy balance sheet despite a merger that may not go through. Declining credit losses and the exit of the student loan portfolio are expected to improve DFS's risk profile and financial performance. Continued growth, combined with the effects of a return to buybacks, should increase EPS over time and allow for attractive returns at today's price. Read the full article on Seeking Alpha
Seeking Alpha Mar 05

Capital One Makes A Brilliant Step Forward With Discover

Summary Capital One plans to acquire Discover Financial in a $35 billion all-stock deal, creating the largest credit card company in the US. The acquisition presents opportunities for synergies, with total synergy opportunities estimated at $2.6 billion. COF will gain access to DFS's payment network, allowing it to compete with Mastercard and Visa, but integration and building up Discover may be costly and challenging. Read the full article on Seeking Alpha
Seeking Alpha Feb 05

Discover Financial Services: High-Yielding Digital Bank And Payment Network

Summary Discover Financial Services operates one of the world’s four major payment networks, putting it in an exclusive (and profitable) club. The company has increased its dividend for 13 consecutive years. While the 10-year dividend growth rate is 13.8%, there’s been a recent acceleration, with the most recent divided raise coming in at 16.7%. Along with this double-digit dividend growth, the stock offers a market-beating 2.6% yield. You don’t often see a yield this high paired with a dividend growth rate this high. Read the full article on Seeking Alpha
Seeking Alpha Jan 26

Discover Financial Services: Down But Far From Out

Summary The Discover Financial Services Q4 earnings miss caused a significant drop in stock value, with shares falling nearly 11% in less than 24 hours. The company's emphasis on younger, lower credit customers is a major factor in its current predicament. Despite the challenges, Discover has strengths such as being the fourth largest credit card network in the U.S. and having a strong digital banking segment. Read the full article on Seeking Alpha

Stability and Growth of Payments

Fetching dividends data

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.


Dividend Yield vs Market

Discover Financial Services Dividend Yield vs Market
How does DFS dividend yield compare to the market?
SegmentDividend Yield
Company (DFS)1.4%
Market Bottom 25% (US)1.3%
Market Top 25% (US)4.0%
Industry Average (Consumer Finance)1.8%
Analyst forecast (DFS) (up to 3 years)1.6%

Notable Dividend: DFS's dividend (1.4%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.55%).

High Dividend: DFS's dividend (1.4%) is low compared to the top 25% of dividend payers in the US market (4.67%).


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (15%), DFS's dividend payments are thoroughly covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (8.3%), DFS's dividend payments are thoroughly covered by cash flows.


Discover strong dividend paying companies

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2025/05/19 12:35
End of Day Share Price 2025/05/16 00:00
Earnings2025/03/31
Annual Earnings2024/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

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.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Discover Financial Services is covered by 26 analysts. 14 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Stephen BiggarArgus Research Company
Kevin St. PierreBernstein
James FotheringhamBMO Capital Markets Equity Research