DISCOVER FINANCIAL SERVICES (DFS)
US2547091080 - Common Stock
DFS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 51 industry peers in the Consumer Finance industry. Both the profitability and the financial health of DFS get a neutral evaluation. Nothing too spectacular is happening here. DFS has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
DFS had positive earnings in the past year.
In the past year DFS had a positive cash flow from operations.
In the past 5 years DFS has always been profitable.
In the past 5 years DFS always reported a positive cash flow from operatings.
1.2 Ratios
DFS has a Return On Assets (1.87%) which is comparable to the rest of the industry.
DFS has a Return On Equity of 17.60%. This is in the better half of the industry: DFS outperforms 76.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.87% | ||
| ROE | 17.6% | ||
| ROIC | N/A |
ROA(3y)3.33%
ROA(5y)2.7%
ROE(3y)29.69%
ROE(5y)24.75%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
DFS's Profit Margin of 16.65% is amongst the best of the industry. DFS outperforms 82.35% of its industry peers.
In the last couple of years the Profit Margin of DFS has declined.
The Operating Margin and Gross Margin are not available for DFS so they could not be analyzed.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | 16.65% | ||
| GM | N/A |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y21.88%
PM growth 5Y-6.41%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
DFS does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for DFS has been reduced compared to 1 year ago.
DFS has less shares outstanding than it did 5 years ago.
DFS has a better debt/assets ratio than last year.
2.2 Solvency
DFS has a debt to FCF ratio of 1.92. This is a very positive value and a sign of high solvency as it would only need 1.92 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.92, DFS belongs to the top of the industry, outperforming 84.31% of the companies in the same industry.
A Debt/Equity ratio of 0.98 indicates that DFS is somewhat dependend on debt financing.
DFS has a Debt to Equity ratio of 0.98. This is in the better half of the industry: DFS outperforms 60.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | 1.92 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC11.72%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
DFS shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.09%.
The Earnings Per Share has been growing slightly by 7.57% on average over the past years.
The Revenue has grown by 13.00% in the past year. This is quite good.
The Revenue has been growing by 8.17% on average over the past years. This is quite good.
EPS 1Y (TTM)-8.09%
EPS 3Y46.34%
EPS 5Y7.57%
EPS Q2Q%42.47%
Revenue 1Y (TTM)13%
Revenue growth 3Y12.67%
Revenue growth 5Y8.17%
Sales Q2Q%10.11%
3.2 Future
The Earnings Per Share is expected to grow by 3.61% on average over the next years.
Based on estimates for the next years, DFS will show a small growth in Revenue. The Revenue will grow by 2.53% on average per year.
EPS Next Y22.55%
EPS Next 2Y6.74%
EPS Next 3Y10.11%
EPS Next 5Y3.61%
Revenue Next Year11.74%
Revenue Next 2Y3.72%
Revenue Next 3Y3.79%
Revenue Next 5Y2.53%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 12.21, which indicates a correct valuation of DFS.
DFS's Price/Earnings is on the same level as the industry average.
DFS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 30.16.
The Price/Forward Earnings ratio is 11.80, which indicates a very decent valuation of DFS.
DFS's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of DFS to the average of the S&P500 Index (23.23), we can say DFS is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.21 | ||
| Fwd PE | 11.8 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DFS indicates a somewhat cheap valuation: DFS is cheaper than 60.78% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.04 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
DFS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PEG (NY)0.54
PEG (5Y)1.61
EPS Next 2Y6.74%
EPS Next 3Y10.11%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.89%, DFS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.17, DFS pays a bit more dividend than its industry peers.
DFS's Dividend Yield is comparable with the S&P500 average which is at 2.25.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
5.2 History
The dividend of DFS is nicely growing with an annual growth rate of 12.65%!
DFS has paid a dividend for at least 10 years, which is a reliable track record.
DFS has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)12.65%
Div Incr Years13
Div Non Decr Years14
5.3 Sustainability
DFS pays out 27.30% of its income as dividend. This is a sustainable payout ratio.
DFS's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP27.3%
EPS Next 2Y6.74%
EPS Next 3Y10.11%
DISCOVER FINANCIAL SERVICES
NYSE:DFS (11/1/2024, 8:04:00 PM)
Premarket: 152.7 +1.4 (+0.93%)151.3
+2.87 (+1.93%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap37.99B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.21 | ||
| Fwd PE | 11.8 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.54
PEG (5Y)1.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.87% | ||
| ROE | 17.6% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | N/A | ||
| PM (TTM) | 16.65% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-8.09%
EPS 3Y46.34%
EPS 5Y
EPS Q2Q%
EPS Next Y22.55%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)13%
Revenue growth 3Y12.67%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y