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 53 industry peers in the Consumer Finance industry. Both the profitability and the financial health of DFS get a neutral evaluation. Nothing too spectacular is happening here. DFS is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
DFS had positive earnings in the past year.
In the past year DFS had a positive cash flow from operations.
DFS had positive earnings in each of the past 5 years.
In the past 5 years DFS always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.56%, DFS is doing good in the industry, outperforming 71.70% of the companies in the same industry.
DFS has a better Return On Equity (29.34%) than 88.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.56% | ||
| ROE | 29.34% | ||
| 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
The Profit Margin of DFS (23.83%) is better than 88.68% 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) | 23.83% | ||
| 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.
DFS has more shares outstanding than it did 1 year ago.
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 1.93. This is a very positive value and a sign of high solvency as it would only need 1.93 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 1.93, DFS belongs to the best of the industry, outperforming 83.02% of the companies in the same industry.
A Debt/Equity ratio of 0.53 indicates that DFS is somewhat dependend on debt financing.
With a decent Debt to Equity ratio value of 0.53, DFS is doing good in the industry, outperforming 71.70% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | 1.93 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC13.11%
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.
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.
The Revenue has grown by 36.14% in the past year. This is a very strong growth!
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
The Earnings Per Share is expected to decrease by -0.72% on average over the next years.
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-13.85%
EPS Next 2Y-1.02%
EPS Next 3Y2.73%
EPS Next 5Y-0.72%
Revenue Next Year-1.62%
Revenue Next 2Y0.86%
Revenue Next 3Y2.37%
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
The Price/Earnings ratio is 9.67, which indicates a very decent valuation of DFS.
Compared to the rest of the industry, the Price/Earnings ratio of DFS indicates a somewhat cheap valuation: DFS is cheaper than 60.38% of the companies listed in the same industry.
DFS is valuated cheaply when we compare the Price/Earnings ratio to 28.79, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 11.82, the valuation of DFS can be described as very reasonable.
DFS's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.38. DFS is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.67 | ||
| Fwd PE | 11.82 |
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 | 5.7 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.81
EPS Next 2Y-1.02%
EPS Next 3Y2.73%
5. Dividend
5.1 Amount
DFS has a Yearly Dividend Yield of 1.49%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.52, DFS has a dividend in line with its industry peers.
DFS's Dividend Yield is slightly below the S&P500 average, which is at 2.47.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
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
14.66% of the earnings are spent on dividend by DFS. This is a low number and sustainable payout ratio.
DP14.66%
EPS Next 2Y-1.02%
EPS Next 3Y2.73%
184.86
-2.6 (-1.39%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners85.15%
Inst Owner Change-56.29%
Ins Owners0.21%
Ins Owner Change1.38%
Market Cap46.51B
Analysts72.38
Price Target204.65 (10.71%)
Short Float %2.01%
Short Ratio2.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
Yearly Dividend3.08
Dividend Growth(5Y)11.46%
DP14.66%
Div Incr Years14
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)31.23%
Min EPS beat(2)6.78%
Max EPS beat(2)55.67%
EPS beat(4)3
Avg EPS beat(4)23.63%
Min EPS beat(4)-63.13%
Max EPS beat(4)95.2%
EPS beat(8)3
Avg EPS beat(8)2.73%
EPS beat(12)6
Avg EPS beat(12)3.1%
EPS beat(16)8
Avg EPS beat(16)9.3%
Revenue beat(2)2
Avg Revenue beat(2)3.51%
Min Revenue beat(2)1.37%
Max Revenue beat(2)5.66%
Revenue beat(4)4
Avg Revenue beat(4)4.24%
Min Revenue beat(4)1.37%
Max Revenue beat(4)7.61%
Revenue beat(8)7
Avg Revenue beat(8)2.44%
Revenue beat(12)10
Avg Revenue beat(12)1.61%
Revenue beat(16)11
Avg Revenue beat(16)1.8%
PT rev (1m)-9.06%
PT rev (3m)16.71%
EPS NQ rev (1m)-0.21%
EPS NQ rev (3m)3.26%
EPS NY rev (1m)-1.17%
EPS NY rev (3m)6.6%
Revenue NQ rev (1m)-0.26%
Revenue NQ rev (3m)0.9%
Revenue NY rev (1m)-0.9%
Revenue NY rev (3m)1.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.67 | ||
| Fwd PE | 11.82 | ||
| P/S | 2.11 | ||
| P/FCF | 5.7 | ||
| P/OCF | 5.52 | ||
| P/B | 2.59 | ||
| P/tB | 2.63 | ||
| EV/EBITDA | N/A |
EPS(TTM)19.11
EY10.34%
EPS(NY)15.64
Fwd EY8.46%
FCF(TTM)32.42
FCFY17.54%
OCF(TTM)33.48
OCFY18.11%
SpS87.72
BVpS71.25
TBVpS70.23
PEG (NY)N/A
PEG (5Y)0.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.56% | ||
| ROE | 29.34% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | 23.83% | ||
| GM | N/A | ||
| FCFM | 36.96% |
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 | 1.93 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 89.33% | ||
| Cap/Sales | 1.21% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | 155.11% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score9
WACC13.11%
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-13.85%
EPS Next 2Y-1.02%
EPS Next 3Y2.73%
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-1.62%
Revenue Next 2Y0.86%
Revenue Next 3Y2.37%
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 1Y-1.25%
FCF growth 3Y11.88%
FCF growth 5Y6.65%
OCF growth 1Y-1.61%
OCF growth 3Y11.86%
OCF growth 5Y6.34%