DISCOVER FINANCIAL SERVICES (DFS) Stock Fundamental Analysis
NYSE:DFS - New York Stock Exchange, Inc. - US2547091080 - Common Stock - Currency: USD
Overall DFS gets a fundamental rating of 4 out of 10. We evaluated DFS against 52 industry peers in the Consumer Finance industry. DFS has only an average score on both its financial health and profitability. While showing a medium growth rate, DFS is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year DFS was profitable.
DFS had a positive operating cash flow in the past year.
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
The Return On Assets of DFS (3.73%) is better than 73.08% of its industry peers.
DFS has a better Return On Equity (29.08%) than 88.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.73% | ||
| ROE | 29.08% | ||
| 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 better Profit Margin (24.89%) than 88.46% of its industry peers.
DFS's Profit Margin has been stable in the last couple of years.
DFS does not have Operating Margin and Gross Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | 24.89% | ||
| 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.
The debt/assets ratio for DFS has been reduced compared to a year ago.
2.2 Solvency
DFS has a debt to FCF ratio of 1.66. This is a very positive value and a sign of high solvency as it would only need 1.66 years to pay back of all of its debts.
DFS's Debt to FCF ratio of 1.66 is amongst the best of the industry. DFS outperforms 86.54% of its industry peers.
A Debt/Equity ratio of 0.53 indicates that DFS is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.53, DFS is in the better half of the industry, outperforming 73.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 1.66 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC13.23%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
DFS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 117.90%, which is quite impressive.
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 36.14%.
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)117.9%
EPS 3Y-3.52%
EPS 5Y11.94%
EPS Q2Q%286.36%
Revenue 1Y (TTM)36.14%
Revenue growth 3Y14.01%
Revenue growth 5Y9.34%
Sales Q2Q%0.97%
3.2 Future
Based on estimates for the next years, DFS will show a decrease in Earnings Per Share. The EPS will decrease by -0.72% on average per year.
The Revenue is expected to grow by 2.79% on average over the next years.
EPS Next Y-8.36%
EPS Next 2Y0.39%
EPS Next 3Y4.38%
EPS Next 5Y-0.72%
Revenue Next Year-0.89%
Revenue Next 2Y1.36%
Revenue Next 3Y2.03%
Revenue Next 5Y2.79%
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
The Price/Earnings ratio is 10.47, which indicates a very decent valuation of DFS.
Compared to the rest of the industry, the Price/Earnings ratio of DFS is on the same level as its industry peers.
When comparing the Price/Earnings ratio of DFS to the average of the S&P500 Index (27.45), we can say DFS is valued rather cheaply.
The Price/Forward Earnings ratio is 12.44, which indicates a correct valuation of DFS.
DFS's Price/Forward Earnings ratio is in line with the industry average.
DFS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.47 | ||
| Fwd PE | 12.44 |
4.2 Price Multiples
DFS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.96 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.88
EPS Next 2Y0.39%
EPS Next 3Y4.38%
5. Dividend
5.1 Amount
DFS has a Yearly Dividend Yield of 1.40%. Purely for dividend investing, there may be better candidates out there.
DFS's Dividend Yield is comparable with the industry average which is at 3.66.
Compared to an average S&P500 Dividend Yield of 2.42, DFS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
5.2 History
On average, the dividend of DFS grows each year by 11.46%, 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)11.46%
Div Incr Years14
Div Non Decr Years15
5.3 Sustainability
DFS pays out 13.98% of its income as dividend. This is a sustainable payout ratio.
DP13.98%
EPS Next 2Y0.39%
EPS Next 3Y4.38%
200.05
-0.43 (-0.21%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners85.15%
Inst Owner Change-1.49%
Ins Owners0.21%
Ins Owner Change-15.17%
Market Cap50.34B
Analysts72.38
Price Target204 (1.97%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
Yearly Dividend3.08
Dividend Growth(5Y)11.46%
DP13.98%
Div Incr Years14
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)40.29%
Min EPS beat(2)24.9%
Max EPS beat(2)55.67%
EPS beat(4)4
Avg EPS beat(4)45.64%
Min EPS beat(4)6.78%
Max EPS beat(4)95.2%
EPS beat(8)4
Avg EPS beat(8)7.01%
EPS beat(12)6
Avg EPS beat(12)3.88%
EPS beat(16)8
Avg EPS beat(16)6.05%
Revenue beat(2)1
Avg Revenue beat(2)2.66%
Min Revenue beat(2)-0.35%
Max Revenue beat(2)5.66%
Revenue beat(4)3
Avg Revenue beat(4)3.57%
Min Revenue beat(4)-0.35%
Max Revenue beat(4)7.61%
Revenue beat(8)6
Avg Revenue beat(8)2.27%
Revenue beat(12)10
Avg Revenue beat(12)1.89%
Revenue beat(16)11
Avg Revenue beat(16)1.79%
PT rev (1m)-0.32%
PT rev (3m)-9.35%
EPS NQ rev (1m)-1.14%
EPS NQ rev (3m)-0.83%
EPS NY rev (1m)6.38%
EPS NY rev (3m)5.61%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-0.68%
Revenue NY rev (1m)0.74%
Revenue NY rev (3m)-0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.47 | ||
| Fwd PE | 12.44 | ||
| P/S | 2.27 | ||
| P/FCF | 5.96 | ||
| P/OCF | 5.78 | ||
| P/B | 2.65 | ||
| P/tB | 2.69 | ||
| EV/EBITDA | N/A |
EPS(TTM)19.11
EY9.55%
EPS(NY)16.09
Fwd EY8.04%
FCF(TTM)33.59
FCFY16.79%
OCF(TTM)34.63
OCFY17.31%
SpS88.06
BVpS75.35
TBVpS74.34
PEG (NY)N/A
PEG (5Y)0.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.73% | ||
| ROE | 29.08% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | 24.89% | ||
| GM | N/A | ||
| FCFM | 38.14% |
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-Score9
Asset Turnover0.15
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 1.66 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 121.4% | ||
| Cap/Sales | 1.18% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | 153.27% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score9
WACC13.23%
ROIC/WACCN/A
Cap/Depr(3y)65.85%
Cap/Depr(5y)57.58%
Cap/Sales(3y)1.73%
Cap/Sales(5y)1.83%
Profit Quality(3y)216.26%
Profit Quality(5y)259.05%
High Growth Momentum
Growth
EPS 1Y (TTM)117.9%
EPS 3Y-3.52%
EPS 5Y11.94%
EPS Q2Q%286.36%
EPS Next Y-8.36%
EPS Next 2Y0.39%
EPS Next 3Y4.38%
EPS Next 5Y-0.72%
Revenue 1Y (TTM)36.14%
Revenue growth 3Y14.01%
Revenue growth 5Y9.34%
Sales Q2Q%0.97%
Revenue Next Year-0.89%
Revenue Next 2Y1.36%
Revenue Next 3Y2.03%
Revenue Next 5Y2.79%
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 1Y21.87%
FCF growth 3Y11.88%
FCF growth 5Y6.65%
OCF growth 1Y21.08%
OCF growth 3Y11.86%
OCF growth 5Y6.34%