DISCOVER FINANCIAL SERVICES (DFS) Fundamental Analysis & Valuation

NYSE:DFS • US2547091080

200.05 USD
-0.43 (-0.21%)
At close: May 16, 2025
198.1 USD
-1.95 (-0.97%)
After Hours: 5/16/2025, 8:04:00 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Forecast Earnings Financials Ownership News

This DFS fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

Fundamental Rating

4

Overall DFS gets a fundamental rating of 4 out of 10. We evaluated DFS against 54 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.


Dividend Valuation Growth Profitability Health

4

1. DFS Profitability Analysis

1.1 Basic Checks

  • In the past year DFS was profitable.
  • DFS had a positive operating cash flow in the past year.
  • Each year in the past 5 years DFS has been profitable.
  • Each year in the past 5 years DFS had a positive operating cash flow.
DFS Yearly Net Income VS EBIT VS OCF VS FCFDFS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

1.2 Ratios

  • Looking at the Return On Assets, with a value of 3.73%, DFS is in the better half of the industry, outperforming 73.08% of the companies in the same industry.
  • The Return On Equity of DFS (29.08%) is better than 88.46% of its industry peers.
Industry RankSector 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
DFS Yearly ROA, ROE, ROICDFS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

1.3 Margins

  • Looking at the Profit Margin, with a value of 24.89%, DFS belongs to the top of the industry, outperforming 88.46% of the companies in the same industry.
  • 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 RankSector 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
DFS Yearly Profit, Operating, Gross MarginsDFS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

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ROAROEROICOperating and Profit MarginShow most profitable peers

4

2. DFS Health Analysis

2.1 Basic Checks

  • DFS does not have a ROIC to compare to the WACC, probably because it is not profitable.
  • Compared to 1 year ago, DFS has more shares outstanding
  • DFS has less shares outstanding than it did 5 years ago.
  • DFS has a better debt/assets ratio than last year.
DFS Yearly Shares OutstandingDFS Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M
DFS Yearly Total Debt VS Total AssetsDFS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 50B 100B 150B

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.
  • The Debt to FCF ratio of DFS (1.66) is better than 86.54% of its industry peers.
  • DFS has a Debt/Equity ratio of 0.53. This is a neutral value indicating DFS is somewhat dependend on debt financing.
  • DFS has a better Debt to Equity ratio (0.53) than 73.08% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.53
Debt/FCF 1.66
Altman-Z N/A
ROIC/WACCN/A
WACC13.23%
DFS Yearly LT Debt VS Equity VS FCFDFS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A
DFS Yearly Current Assets VS Current LiabilitesDFS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B 10B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. DFS Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an impressive 117.90% over the past year.
  • DFS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.94% yearly.
  • Looking at the last year, DFS shows a very strong growth in Revenue. The Revenue has grown by 36.14%.
  • The Revenue has been growing by 9.34% on average over the past years. This is quite good.
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.
  • Based on estimates for the next years, DFS will show a small growth in Revenue. The Revenue will grow by 2.79% on average per year.
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

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
  • 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.
DFS Yearly Revenue VS EstimatesDFS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 5B 10B 15B 20B
DFS Yearly EPS VS EstimatesDFS Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 5 10 15

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3

4. DFS Valuation Analysis

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 10.47, the valuation of DFS can be described as very reasonable.
  • DFS's Price/Earnings ratio is in line with the industry average.
  • DFS is valuated cheaply when we compare the Price/Earnings ratio to 26.46, which is the current average of the S&P500 Index.
  • DFS is valuated correctly with a Price/Forward Earnings ratio of 12.44.
  • 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 24.65.
Industry RankSector Rank
PE 10.47
Fwd PE 12.44
DFS Price Earnings VS Forward Price EarningsDFS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

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 RankSector Rank
P/FCF 5.96
EV/EBITDA N/A
DFS Per share dataDFS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60 80

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)0.88
EPS Next 2Y0.39%
EPS Next 3Y4.38%

More info and screens

Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

5

5. DFS Dividend Analysis

5.1 Amount

  • DFS has a Yearly Dividend Yield of 1.40%. Purely for dividend investing, there may be better candidates out there.
  • Compared to an average industry Dividend Yield of 2.82, DFS has a dividend in line with its industry peers.
  • DFS's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
Industry RankSector Rank
Dividend Yield 1.4%

5.2 History

  • The dividend of DFS is nicely growing with an annual growth rate of 11.46%!
  • DFS has paid a dividend for at least 10 years, which is 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
DFS Yearly Dividends per shareDFS Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5 2 2.5

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%
DFS Yearly Income VS Free CF VS DividendDFS Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B
DFS Dividend Payout.DFS Dividend Payout, showing the Payout Ratio.DFS Dividend Payout.PayoutRetained Earnings

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DFS Fundamentals: All Metrics, Ratios and Statistics

DISCOVER FINANCIAL SERVICES

NYSE:DFS (5/16/2025, 8:04:00 PM)

After market: 198.1 -1.95 (-0.97%)

200.05

-0.43 (-0.21%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)04-23
Earnings (Next)07-15
Inst Owners85.15%
Inst Owner Change-98.76%
Ins Owners0.21%
Ins Owner Change0%
Market Cap50.34B
Revenue(TTM)22.16B
Net Income(TTM)5.51B
Analysts72.38
Price Target204 (1.97%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 1.4%
Yearly Dividend3.08
Dividend Growth(5Y)11.46%
DP13.98%
Div Incr Years14
Div Non Decr Years15
Ex-DateN/A
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 RankSector 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
Graham NumberN/A
Profitability
Industry RankSector 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
ROICexgc growth 3YN/A
ROICexgc 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 RankSector 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%

DISCOVER FINANCIAL SERVICES / DFS FAQ

Can you provide the ChartMill fundamental rating for DISCOVER FINANCIAL SERVICES?

ChartMill assigns a fundamental rating of 4 / 10 to DFS.


What is the valuation status of DISCOVER FINANCIAL SERVICES (DFS) stock?

ChartMill assigns a valuation rating of 3 / 10 to DISCOVER FINANCIAL SERVICES (DFS). This can be considered as Overvalued.


Can you provide the profitability details for DISCOVER FINANCIAL SERVICES?

DISCOVER FINANCIAL SERVICES (DFS) has a profitability rating of 4 / 10.


Can you provide the PE and PB ratios for DFS stock?

The Price/Earnings (PE) ratio for DISCOVER FINANCIAL SERVICES (DFS) is 10.47 and the Price/Book (PB) ratio is 2.65.


Is the dividend of DISCOVER FINANCIAL SERVICES sustainable?

The dividend rating of DISCOVER FINANCIAL SERVICES (DFS) is 5 / 10 and the dividend payout ratio is 13.98%.