DFS Fundamental Analysis - DISCOVER FINANCIAL SERVICES

Fundamental Rating

DFS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 52 industry peers in the Consumer Finance industry. DFS has an average financial health and profitability rating. While showing a medium growth rate, DFS is valued expensive at the moment.

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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.

DFS had positive earnings in each of the past 5 years.

DFS had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of DFS (3.73%) is better than 73.08% of its industry peers.

Looking at the Return On Equity, with a value of 29.08%, DFS belongs to the top of the industry, outperforming 88.46% of the companies in the same industry.

		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.

DFS's Profit Margin has been stable in the last couple of years.

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

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ROA

ROE

ROIC

Operating and Profit Margin

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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

Compared to 1 year ago, DFS has an improved debt to assets ratio.

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.

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

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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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.

Measured over the past years, DFS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.94% on average per year.

Looking at the last year, DFS shows a very strong growth in Revenue. The Revenue has grown by 36.14%.

Measured over the past years, DFS shows a quite strong growth in Revenue. The Revenue has been growing by 9.34% on average per year.

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

The Earnings Per Share is expected to decrease by -0.72% on average over the next years.

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

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.

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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.

Compared to the rest of the industry, the Price/Earnings ratio of DFS is on the same level as its industry peers.

DFS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.59.

Based on the Price/Forward Earnings ratio of 12.44, the valuation of DFS can be described as correct.

DFS's Price/Forward Earnings is on the same level as the industry average.

DFS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.39.

		Industry Rank	Sector Rank
PE	10.47
Fwd PE	12.44

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	5.96
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%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.40%, DFS has a reasonable but not impressive dividend return.

Compared to an average industry Dividend Yield of 3.69, DFS has a dividend in line with its industry peers.

Compared to an average S&P500 Dividend Yield of 2.39, DFS's dividend is way lower than the S&P500 average.

		Industry Rank	Sector 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 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

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%

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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 2025-04-23/amc

Earnings (Next)07-15 2025-07-15/amc

Inst Owners85.15%

Inst Owner Change-1.49%

Ins Owners0.21%

Ins Owner Change-15.13%

Market Cap50.34B

Analysts72.38

Price Target204 (1.97%)

Short Float %2.24%

Short Ratio1.81

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-Date05-23 2025-05-23 (0.7)

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%

DISCOVER FINANCIAL SERVICES (DFS) Stock Fundamental Analysis

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

More info and screens

2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

More info and screens

3. Growth

3.1 Past

3.2 Future

3.3 Evolution

More info and screens

4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

More info and screens

5. Dividend

5.1 Amount

5.2 History

5.3 Sustainability

More info and screens