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Discover Financial Services DFS

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Morningstar’s Analysis

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1-Star Price

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5-Star Price

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Economic Moat

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Capital Allocation

PREMIUM

Strong Credit Performance and Improved Net Interest Margins Drive Good Results for Discover

Michael Miller Equity Analyst

Analyst Note

| Michael Miller |

Narrow-moat Discover Financial reported a decent fourth quarter, as the company continues to recover from the first half of 2020, with diluted EPS of $2.59 during the quarter beating the FactSet consensus estimate of $2.42. These results equate to a return on equity of 30%. The company also announced that it was reinstating share repurchases with a new $1.1 billion buyback plan.

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Company Profile

Business Description

Discover Financial Services is a bank operating in two distinct segments: direct banking and payments. The company issues credit and debit cards and provides other consumer banking products including deposit accounts, students loans, and other personal loans. In addition, it generates revenue from payments processed on the Discover network. The Discover Network is the third- largest payment network as ranked by overall merchant acceptance, trailing Visa and Mastercard.

Contact
2500 Lake Cook Road
Riverwoods, IL, 60015
T +1 224 405-0900
Sector Financial Services
Industry Credit Services
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 17,600

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