DISCOVER FINANCIAL SERVICES (DFS) Fundamental Analysis & Valuation

NYSE:DFS • US2547091080

Current stock price

200.05 USD
-0.43 (-0.21%)
At close:
198.1 USD
-1.95 (-0.97%)
After Hours:

This DFS fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

4

1. DFS Profitability Analysis

1.1 Basic Checks

  • In the past year DFS was profitable.
  • In the past year DFS had a positive cash flow from operations.
  • Each year in the past 5 years DFS has been profitable.
  • DFS had a positive operating cash flow in each of the past 5 years.
DFS Yearly Net Income VS EBIT VS OCF VS FCFDFS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

1.2 Ratios

  • DFS's Return On Assets of 3.73% is fine compared to the rest of the industry. DFS outperforms 73.08% of its industry peers.
  • With an excellent Return On Equity value of 29.08%, DFS belongs to the best of the industry, outperforming 88.46% of the companies in the same industry.
Industry RankSector 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
DFS Yearly ROA, ROE, ROICDFS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

1.3 Margins

  • With an excellent Profit Margin value of 24.89%, DFS belongs to the best 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.
  • DFS does not have Operating Margin and Gross Margin available, so we won't be analyzing them here.
Industry RankSector 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
DFS Yearly Profit, Operating, Gross MarginsDFS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

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4

2. DFS Health Analysis

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.
DFS Yearly Shares OutstandingDFS Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M
DFS Yearly Total Debt VS Total AssetsDFS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 50B 100B 150B

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.
  • Looking at the Debt to FCF ratio, with a value of 1.66, DFS belongs to the top 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.
  • The Debt to Equity ratio of DFS (0.53) is better than 73.08% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.53
Debt/FCF 1.66
Altman-Z N/A
ROIC/WACCN/A
WACC13.23%
DFS Yearly LT Debt VS Equity VS FCFDFS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A
DFS Yearly Current Assets VS Current LiabilitesDFS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B 10B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. DFS Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an impressive 117.90% over the past year.
  • DFS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.94% yearly.
  • 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

  • Based on estimates for the next years, DFS will show a decrease in Earnings Per Share. The EPS will decrease by -0.72% on average per year.
  • DFS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.79% yearly.
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.
DFS Yearly Revenue VS EstimatesDFS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 5B 10B 15B 20B
DFS Yearly EPS VS EstimatesDFS Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 5 10 15

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3

4. DFS Valuation Analysis

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 10.47, the valuation of DFS can be described as very reasonable.
  • Compared to the rest of the industry, the Price/Earnings ratio of DFS is on the same level as its industry peers.
  • The average S&P500 Price/Earnings ratio is at 25.60. DFS is valued rather cheaply when compared to this.
  • DFS is valuated correctly with a Price/Forward Earnings ratio of 12.44.
  • The rest of the industry has a similar Price/Forward Earnings ratio as DFS.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 22.84, DFS is valued a bit cheaper.
Industry RankSector Rank
PE 10.47
Fwd PE 12.44
DFS Price Earnings VS Forward Price EarningsDFS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • DFS's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 5.96
EV/EBITDA N/A
DFS Per share dataDFS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60 80

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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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

5

5. DFS Dividend Analysis

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 3.15.
  • Compared to the average S&P500 Dividend Yield of 1.88, DFS is paying slightly less dividend.
Industry RankSector 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
DFS Yearly Dividends per shareDFS Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5 2 2.5

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%
DFS Yearly Income VS Free CF VS DividendDFS Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B
DFS Dividend Payout.DFS Dividend Payout, showing the Payout Ratio.DFS Dividend Payout.PayoutRetained Earnings

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DFS Fundamentals: All Metrics, Ratios and Statistics

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
Earnings (Next)07-15
Inst Owners85.15%
Inst Owner Change-98.76%
Ins Owners0.21%
Ins Owner Change0%
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 RankSector Rank
Dividend Yield 1.4%
Yearly Dividend3.08
Dividend Growth(5Y)11.46%
DP13.98%
Div Incr Years14
Div Non Decr Years15
Ex-DateN/A
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 RankSector 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 RankSector 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 RankSector 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 Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for DISCOVER FINANCIAL SERVICES?

ChartMill assigns a fundamental rating of 4 / 10 to DFS.


What is the valuation status for DFS stock?

ChartMill assigns a valuation rating of 3 / 10 to DISCOVER FINANCIAL SERVICES (DFS). This can be considered as Overvalued.


How profitable is DISCOVER FINANCIAL SERVICES (DFS) stock?

DISCOVER FINANCIAL SERVICES (DFS) has a profitability rating of 4 / 10.


What is the expected EPS growth for DISCOVER FINANCIAL SERVICES (DFS) stock?

The Earnings per Share (EPS) of DISCOVER FINANCIAL SERVICES (DFS) is expected to decline by -8.36% in the next year.


Is the dividend of DISCOVER FINANCIAL SERVICES sustainable?

The dividend rating of DISCOVER FINANCIAL SERVICES (DFS) is 5 / 10 and the dividend payout ratio is 13.98%.