DISCOVER FINANCIAL SERVICES (DFS) Stock Fundamental Analysis
USA - NYSE:DFS - US2547091080 - Common Stock
200.05 USD
-0.43 (-0.21%)
198.1 USD
-1.95 (-0.97%)
We assign a fundamental rating of 4 out of 10 to DFS. DFS was compared to 55 industry peers in the Consumer Finance industry. DFS has only an average score on both its financial health and profitability. DFS has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year DFS was profitable.
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 of 3.73%. This is in the better half of the industry: DFS outperforms 73.08% of its industry peers.
DFS's Return On Equity of 29.08% is amongst the best of the industry. DFS outperforms 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
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.
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) | 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.
Compared to 1 year ago, DFS has more shares outstanding
Compared to 5 years ago, DFS has less shares outstanding
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.
The Debt to FCF ratio of DFS (1.66) is better than 86.54% of its industry peers.
A Debt/Equity ratio of 0.53 indicates that DFS is somewhat dependend on debt financing.
DFS has a Debt to Equity ratio of 0.53. This is in the better half of the industry: DFS outperforms 73.08% of its industry peers.
| 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%.
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
DFS is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.72% yearly.
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.
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
Based on the Price/Earnings ratio of 10.47, the valuation of DFS can be described as reasonable.
The rest of the industry has a similar Price/Earnings ratio as DFS.
Compared to an average S&P500 Price/Earnings ratio of 25.89, DFS is valued rather cheaply.
The Price/Forward Earnings ratio is 12.44, which indicates a correct valuation of DFS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DFS is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.59, DFS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.47 | ||
| Fwd PE | 12.44 |
4.2 Price Multiples
The rest of the industry has a similar Price/Free Cash Flow ratio as DFS.
| 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%.
Compared to an average industry Dividend Yield of 4.70, DFS has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, 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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.46%
Div Incr Years14
Div Non Decr Years15
5.3 Sustainability
13.98% of the earnings are spent on dividend by DFS. This is a low number and 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-25.61%
Ins Owners0.21%
Ins Owner Change-34.51%
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 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
Graham NumberN/A
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
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 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%
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.
Can you provide the valuation status for DISCOVER FINANCIAL SERVICES?
ChartMill assigns a valuation rating of 3 / 10 to DISCOVER FINANCIAL SERVICES (DFS). This can be considered as Overvalued.
What is the profitability of DFS stock?
DISCOVER FINANCIAL SERVICES (DFS) has a profitability rating of 4 / 10.
What are the PE and PB ratios of DISCOVER FINANCIAL SERVICES (DFS) stock?
The Price/Earnings (PE) ratio for DISCOVER FINANCIAL SERVICES (DFS) is 10.47 and the Price/Book (PB) ratio is 2.65.
Can you provide the expected EPS growth for DFS stock?
The Earnings per Share (EPS) of DISCOVER FINANCIAL SERVICES (DFS) is expected to decline by -8.36% in the next year.