Why I Like Discover Financial Services (NYSE:DFS)

Attractive stocks have exceptional fundamentals. In the case of Discover Financial Services (NYSE:DFS), there’s is a notable dividend payer that has been a rockstar for income investors, currently trading at an attractive share price. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Discover Financial Services here.

Established dividend payer and good value

DFS is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Compared to the rest of the consumer finance industry, DFS is also trading below its peers, relative to earnings generated. This further reaffirms that DFS is potentially undervalued.

NYSE:DFS Intrinsic value, March 26th 2019
NYSE:DFS Intrinsic value, March 26th 2019

Income investors would also be happy to know that DFS is a great dividend company, with a current yield standing at 2.3%. DFS has also been regularly increasing its dividend payments to shareholders over the past decade.

NYSE:DFS Historical Dividend Yield, March 26th 2019
NYSE:DFS Historical Dividend Yield, March 26th 2019

Next Steps:

For Discover Financial Services, I’ve put together three fundamental aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for DFS’s future growth? Take a look at our free research report of analyst consensus for DFS’s outlook.
  2. Historical Performance: What has DFS’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of DFS? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.