Narrow-moat-rated Discover Financial Services reported decent first-quarter results that were affected by additional losses associated with its product compliance issues. Earnings per share fell 69% from last year and 28.6% from last quarter to $1.10, while revenue increased 13% from last year to $4.2 billion. These results translate to a return on equity of 8%, well below the bank’s historical average.
Discover has consistently been able to generate returns on equity that are among the highest of its peers.
Discover is subject to the same competitive rewards environment as other credit card issuers. Its rewards rate has climbed over time and is likely to continue to do so.
|
Metric
|
DFS
|
AXP
|
MA
|
|---|---|---|---|
Price/Earnings (Normalized) | 10.93 | 19.07 | 36.06 |
Price/Book Value | 2.27 | 5.79 | 56.83 |
Price/Sales | 1.90 | 2.73 | 16.18 |
Price/Cash Flow | 3.85 | 10.94 | 28.53 |
|
Metric
|
DFS
|
AXP
|
MA
|
|---|---|---|---|
Quick Ratio | — | — | 0.70 |
Current Ratio | — | — | 1.09 |
Interest Coverage | — | — | 25.19 |
|
Metric
|
DFS
|
AXP
|
MA
|
|---|---|---|---|
Return on Assets (Normalized) | 1.60% | 3.77% | 30.77% |
Return on Equity (Normalized) | 17.20% | 34.77% | 199.10% |
Return on Invested Capital (Normalized) | — | — | 59.05% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
V
| Visa Inc Class A | Psztlhrq | Qswwc | $547.0 Bil | |
MA
| Mastercard Inc Class A | Brtycvgq | Zqrx | $411.0 Bil | |
AXP
| American Express Co | Ppmjrzkf | Rnp | $166.5 Bil | |
PYPL
| PayPal Holdings Inc | Bxcgbzgb | Qsvwtq | $69.2 Bil | |
COF
| Capital One Financial Corp | Zyjqzyc | Dxkyfm | $54.1 Bil | |
SYF
| Synchrony Financial | Wpqdgly | Kjlz | $17.7 Bil | |
ALLY
| Ally Financial Inc | Gpxtfbyh | Zqhtr | $11.7 Bil | |
SOFI
| SoFi Technologies Inc Ordinary Shares | Zxqnmqml | Dfqx | $7.3 Bil | |
WU
| The Western Union Co | Gxvssfqc | Zzcrry | $4.5 Bil |
