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Discover Financial Services DFS

Morningstar Rating
$131.09 +3.09 (2.41%)
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Company Report

Discover Agrees to Be Acquired by Capital One

After a period of unusually strong results from high loan growth and low net charge-offs industrywide, Discover will face a more difficult operating environment in 2024. While credit costs had initially normalized from their postpandemic lows slower than we had expected, they increased materially in 2023 and we expect them to rise further in 2024. This will reduce the bank's returns in the near term and likely lead to tighter underwriting and lower loan growth.

Price vs Fair Value

DFS is trading at a 13% discount.
Price
$125.26
Fair Value
$939.00
Uncertainty
High
1-Star Price
$615.10
5-Star Price
$45.50
Economic Moat
Zftjz
Capital Allocation
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Bulls Say, Bears Say

Bulls

Discover has consistently been able to generate returns on equity that are among the highest of its peers.

Bears

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.

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News

Trading Information

Previous Close Price
$128.00
Day Range
$127.61131.65
52-Week Range
$79.04131.65
Bid/Ask
$129.57 / $131.33
Market Cap
$32.85 Bil
Volume/Avg
1.9 Mil / 2.5 Mil

Key Statistics

Price/Earnings (Normalized)
11.38
Price/Sales
2.05
Dividend Yield (Trailing)
2.19%
Dividend Yield (Forward)
2.19%
Total Yield
8.19%

Company Profile

Discover Financial Services is a bank operating in two distinct segments: direct banking and payment services. The company issues credit and debit cards and provides other consumer banking products including deposit accounts, students loans, and other personal loans. It also operates the Discover, Pulse, and Diners Club networks. The Discover network is the fourth-largest payment network in the United States as ranked by overall purchase volume, and Pulse is one of the largest ATM networks in the country.
Sector
Financial Services
Industry
Credit Services
Stock Style Box
Mid Growth
Total Number of Employees
21,100

Competitors

Valuation

Metric
DFS
MA
COF
Price/Earnings (Normalized)
11.3838.9811.54
Price/Book Value
2.3264.430.95
Price/Sales
2.0518.021.51
Price/Cash Flow
3.8332.473.04
Price/Earnings
DFS
MA
COF

Financial Strength

Metric
DFS
MA
COF
Quick Ratio
0.81
Current Ratio
1.17
Interest Coverage
24.72
Quick Ratio
DFS
MA
COF

Profitability

Metric
DFS
MA
COF
Return on Assets (Normalized)
2.12%29.19%1.02%
Return on Equity (Normalized)
22.27%191.08%8.78%
Return on Invested Capital (Normalized)
56.34%
Return on Assets
DFS
MA
COF
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SYF
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