DFS Fundamental Analysis - DISCOVER FINANCIAL SERVICES

Fundamental Rating

Taking everything into account, DFS scores 4 out of 10 in our fundamental rating. DFS was compared to 55 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.

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

DFS has a Profit Margin of 24.89%. This is amongst the best in the industry. DFS outperforms 88.46% of its industry peers.

In the last couple of years the Profit Margin of DFS has remained more or less at the same level.

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)	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.

DFS has more shares outstanding than it did 1 year ago.

The number of shares outstanding for DFS has been reduced compared to 5 years ago.

DFS has a better debt/assets ratio than last year.

2.2 Solvency

The Debt to FCF ratio of DFS is 1.66, which is an excellent value as it means it would take DFS, only 1.66 years of fcf income to pay off 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.

A Debt/Equity ratio of 0.53 indicates that DFS is somewhat dependend on debt financing.

DFS's Debt to Equity ratio of 0.53 is fine compared to the rest 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

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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.

The Earnings Per Share has been growing by 11.94% on average over the past years. This is quite good.

The Revenue has grown by 36.14% in the past year. This is a very strong growth!

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.

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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 10.47 indicates a reasonable valuation of DFS.

DFS's Price/Earnings ratio is in line with the industry average.

DFS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.38.

The Price/Forward Earnings ratio is 12.44, which indicates a correct valuation of DFS.

The rest of the industry has a similar Price/Forward Earnings ratio as DFS.

When comparing the Price/Forward Earnings ratio of DFS to the average of the S&P500 Index (22.86), we can say DFS is valued slightly cheaper.

		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%

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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.

DFS's Dividend Yield is comparable with the industry average which is at 4.22.

With a Dividend Yield of 1.40, DFS pays less dividend than the S&P500 average, which is at 2.38.

		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 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

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-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-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