DISCOVER FINANCIAL SERVICES (DFS) Stock Fundamental Analysis
NYSE:DFS - US2547091080 - Common Stock
200.05 USD
-0.43 (-0.21%)
198.1 USD
-1.95 (-0.97%)
Taking everything into account, DFS scores 4 out of 10 in our fundamental rating. DFS was compared to 53 industry peers in the Consumer Finance industry. DFS has only an average score on both its financial health and profitability. DFS is valied quite expensively at the moment, while it does show a decent growth rate.
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.
DFS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
DFS has a better Return On Assets (3.73%) 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.
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
DFS has less shares outstanding than it did 5 years ago.
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.
With an excellent Debt to FCF ratio value of 1.66, DFS belongs to the best of the industry, outperforming 86.54% of the companies in the same industry.
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 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.
Looking at the last year, DFS shows a very strong growth in Revenue. 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
DFS is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.72% yearly.
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.
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 reasonably with a Price/Earnings ratio of 10.47.
DFS's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of DFS to the average of the S&P500 Index (27.17), we can say DFS is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 12.44, the valuation of DFS can be described as correct.
The rest of the industry has a similar Price/Forward Earnings ratio as DFS.
DFS's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.78.
| 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%
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.
Compared to an average industry Dividend Yield of 4.23, DFS has a dividend in line with its industry peers.
With a Dividend Yield of 1.40, DFS pays less dividend than the S&P500 average, which is at 2.34.
| 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 paid a dividend for at least 10 years, which is 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%
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-96.12%
Ins Owners0.21%
Ins Owner Change-17.35%
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%