DISCOVER FINANCIAL SERVICES (DFS) Stock Fundamental Analysis
NYSE:DFS - New York Stock Exchange, Inc. - US2547091080 - Common Stock - Currency: USD
DFS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 53 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. While showing a medium growth rate, DFS is valued expensive at the moment.
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.
Each year in the past 5 years DFS has been profitable.
DFS had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of DFS (2.88%) is better than 73.08% of its industry peers.
Looking at the Return On Equity, with a value of 25.49%, DFS belongs to the top of the industry, outperforming 88.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.88% | ||
| ROE | 25.49% | ||
| ROIC | N/A |
ROA(3y)2.69%
ROA(5y)2.78%
ROE(3y)24.58%
ROE(5y)24.76%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
DFS has a Profit Margin of 20.28%. This is amongst the best in the industry. DFS outperforms 86.54% of its industry peers.
In the last couple of years the Profit Margin of DFS has remained more or less at the same level.
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) | 20.28% | ||
| GM | N/A |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-17.54%
PM growth 5Y-0.44%
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 increased 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 1.89. This is a very positive value and a sign of high solvency as it would only need 1.89 years to pay back of all of its debts.
DFS has a Debt to FCF ratio of 1.89. This is amongst the best in the industry. DFS outperforms 80.77% of its industry peers.
A Debt/Equity ratio of 0.97 indicates that DFS is somewhat dependend on debt financing.
DFS has a Debt to Equity ratio (0.97) which is comparable to the rest of the industry.
Even though the debt/equity ratio score it not favorable for DFS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.97 | ||
| Debt/FCF | 1.89 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC11.69%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 41.87% over the past year.
The Earnings Per Share has been growing by 11.94% on average over the past years. This is quite good.
DFS shows a strong growth in Revenue. In the last year, the Revenue has grown by 39.16%.
DFS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.34% yearly.
EPS 1Y (TTM)41.87%
EPS 3Y-3.52%
EPS 5Y11.94%
EPS Q2Q%231.82%
Revenue 1Y (TTM)39.16%
Revenue growth 3Y14.01%
Revenue growth 5Y9.34%
Sales Q2Q%13.42%
3.2 Future
Based on estimates for the next years, DFS will show a decrease in Earnings Per Share. The EPS will decrease by -2.76% on average per year.
Based on estimates for the next years, DFS will show a small growth in Revenue. The Revenue will grow by 0.59% on average per year.
EPS Next Y-13.19%
EPS Next 2Y-0.55%
EPS Next 3Y3.49%
EPS Next 5Y-2.76%
Revenue Next Year-0.73%
Revenue Next 2Y1.17%
Revenue Next 3Y2.97%
Revenue Next 5Y0.59%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
DFS is valuated correctly with a Price/Earnings ratio of 12.18.
DFS's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 29.63. DFS is valued rather cheaply when compared to this.
DFS is valuated correctly with a Price/Forward Earnings ratio of 14.03.
The rest of the industry has a similar Price/Forward Earnings ratio as DFS.
The average S&P500 Price/Forward Earnings ratio is at 22.68. DFS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.18 | ||
| Fwd PE | 14.03 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DFS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.39 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.02
EPS Next 2Y-0.55%
EPS Next 3Y3.49%
5. Dividend
5.1 Amount
DFS has a Yearly Dividend Yield of 1.47%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.09, DFS pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.29, DFS is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.47% |
5.2 History
On average, the dividend of DFS grows each year by 12.65%, which is quite nice.
DFS has been paying a dividend for at least 10 years, so it has a reliable track record.
DFS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.65%
Div Incr Years14
Div Non Decr Years15
5.3 Sustainability
17.68% of the earnings are spent on dividend by DFS. This is a low number and sustainable payout ratio.
DP17.68%
EPS Next 2Y-0.55%
EPS Next 3Y3.49%
194.34
-5.56 (-2.78%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners86.7%
Inst Owner Change0.08%
Ins Owners0.2%
Ins Owner Change1.89%
Market Cap48.78B
Analysts72.38
Price Target220.23 (13.32%)
Short Float %1.38%
Short Ratio2.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.47% |
Yearly Dividend2.91
Dividend Growth(5Y)12.65%
DP17.68%
Div Incr Years14
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)50.99%
Min EPS beat(2)6.78%
Max EPS beat(2)95.2%
EPS beat(4)2
Avg EPS beat(4)-0.06%
Min EPS beat(4)-63.13%
Max EPS beat(4)95.2%
EPS beat(8)3
Avg EPS beat(8)-3.96%
EPS beat(12)5
Avg EPS beat(12)-1.73%
EPS beat(16)8
Avg EPS beat(16)6.19%
Revenue beat(2)2
Avg Revenue beat(2)4.49%
Min Revenue beat(2)1.37%
Max Revenue beat(2)7.61%
Revenue beat(4)4
Avg Revenue beat(4)3.18%
Min Revenue beat(4)1.37%
Max Revenue beat(4)7.61%
Revenue beat(8)7
Avg Revenue beat(8)1.85%
Revenue beat(12)9
Avg Revenue beat(12)0.87%
Revenue beat(16)10
Avg Revenue beat(16)1.4%
PT rev (1m)25.59%
PT rev (3m)42.05%
EPS NQ rev (1m)9.82%
EPS NQ rev (3m)11.11%
EPS NY rev (1m)7.42%
EPS NY rev (3m)8.1%
Revenue NQ rev (1m)-1.49%
Revenue NQ rev (3m)-1.7%
Revenue NY rev (1m)0.52%
Revenue NY rev (3m)2.95%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.18 | ||
| Fwd PE | 14.03 | ||
| P/S | 2.27 | ||
| P/FCF | 5.39 | ||
| P/OCF | 5.23 | ||
| P/B | 2.85 | ||
| P/tB | 2.89 | ||
| EV/EBITDA | N/A |
EPS(TTM)15.96
EY8.21%
EPS(NY)13.85
Fwd EY7.13%
FCF(TTM)36.05
FCFY18.55%
OCF(TTM)37.14
OCFY19.11%
SpS85.69
BVpS68.16
TBVpS67.15
PEG (NY)N/A
PEG (5Y)1.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.88% | ||
| ROE | 25.49% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | 20.28% | ||
| GM | N/A | ||
| FCFM | 42.07% |
ROA(3y)2.69%
ROA(5y)2.78%
ROE(3y)24.58%
ROE(5y)24.76%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-17.54%
PM growth 5Y-0.44%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.97 | ||
| Debt/FCF | 1.89 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 73.19% | ||
| Cap/Sales | 1.27% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | 207.48% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score7
WACC11.69%
ROIC/WACCN/A
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)41.87%
EPS 3Y-3.52%
EPS 5Y11.94%
EPS Q2Q%231.82%
EPS Next Y-13.19%
EPS Next 2Y-0.55%
EPS Next 3Y3.49%
EPS Next 5Y-2.76%
Revenue 1Y (TTM)39.16%
Revenue growth 3Y14.01%
Revenue growth 5Y9.34%
Sales Q2Q%13.42%
Revenue Next Year-0.73%
Revenue Next 2Y1.17%
Revenue Next 3Y2.97%
Revenue Next 5Y0.59%
EBIT growth 1YN/A
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y19.54%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y18.56%
OCF growth 3YN/A
OCF growth 5YN/A