Skip to Content

Discover Financial Services DFS

Morningstar Rating
$125.35 +1.08 (0.87%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

Discover Earnings: Additional Compliance Costs Mar Otherwise Solid Quarter

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.

Price vs Fair Value

DFS is trading at a 13% discount.
Price
$125.35
Fair Value
$479.00
Uncertainty
High
1-Star Price
$742.30
5-Star Price
$37.20
Economic Moat
Ttmxqr
Capital Allocation
Ybtmgqhq

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.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if DFS is a good fit for your portfolio.

News

Trading Information

Previous Close Price
$124.27
Day Range
$123.80126.15
52-Week Range
$79.04131.65
Bid/Ask
$124.69 / $125.67
Market Cap
$31.41 Bil
Volume/Avg
1.5 Mil / 2.2 Mil

Key Statistics

Price/Earnings (Normalized)
11.05
Price/Sales
1.91
Dividend Yield (Trailing)
2.23%
Dividend Yield (Forward)
2.23%
Total Yield
8.44%

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)
11.0537.0911.31
Price/Book Value
2.2861.290.93
Price/Sales
1.9117.141.48
Price/Cash Flow
3.7230.892.98
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
See how this stock stacks up to its competitors with Morningstar Investor

Credit Services Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
V
Visa Inc Class ASrstzgmxjSylh$557.4 Bil
MA
Mastercard Inc Class AFyfpypqwmNcpm$424.2 Bil
AXP
American Express CoDmnbwpqhyNrk$156.6 Bil
PYPL
PayPal Holdings IncQkcjnhbkhWvbkcql$65.4 Bil
COF
Capital One Financial CorpSfpvhprRwjwdx$54.4 Bil
SYF
Synchrony FinancialNcfvdcrGwl$16.6 Bil
ALLY
Ally Financial IncWhlvpqwzHvdf$11.9 Bil
SOFI
SoFi Technologies Inc Ordinary SharesZmmpgkcvJhnrc$7.5 Bil
WU
The Western Union CoYyftpfnyHgkkj$4.4 Bil

Sponsor Center