Fact based stock research
Discover Financial Services (NYSE:DFS)

US2547091080

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Discover Financial Services stock research in summary

discover.com

ANALYSIS: With an Obermatt Combined Rank of 26 (worse than 74% compared with investment alternatives), Discover Financial Services (Consumer Finance, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Discover Financial Services are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives) and show below-average growth (Growth Rank of 27) but are safely financed (Safety Rank of 56), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 26, is a hold recommendation based on Discover Financial Services's financial characteristics. As the company Discover Financial Services's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 39) and low growth (Obermatt Growth Rank of 27), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 56) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	39
Growth Rank	27
Safety Rank	56
Combined Rank	26

Country	USA
Industry	Consumer Finance
Index	Diversity USA, S&P 500
Size class	X-Large

27-Mar-2025. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Discover Financial Services

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	39	52	37	39
GROWTH
GROWTH	61	51	21	27
SAFETY
SAFETY	80	61	98	56
SENTIMENT
SENTIMENT	91	86	33	^new
360° VIEW
360° VIEW	95	89	37	^new

Most recent update of the stock research: 27-Mar-2025. Financial reporting date used for calculating ranks: 31-Dec-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Discover Financial Services is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	39	52	37	39
GROWTH
GROWTH	61	51	21	27
SAFETY
SAFETY	80	61	98	56
COMBINED
COMBINED	82	65	60	26

Last update of combined financial performance: 27-Mar-2025. Stock analysis on combined financial performance: The higher the rank of Discover Financial Services the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Discover Financial Services shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Discover Financial Services. Price-to-Sales (P/S) is 50, which means that the stock price compared with what market professionals expect for future sales is lower than for 50% of comparable companies, indicating a good value concerning Discover Financial Services's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 53, which means that dividends are expected to be higher than for 53% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 63% of alternatives (only 37% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 57% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Discover Financial Services's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2022	2023	2024	2025
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	44	67	45	50
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	63	69	40	43
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	28	34	42	37
DIVIDEND YIELD
DIVIDEND YIELD	55	62	53	53
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	39	52	37	39

Last update of Value Rank: 27-Mar-2025. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Discover Financial Services; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), Discover Financial Services shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Discover Financial Services. Capital Growth has a rank of 95, which means that currently professionals expect the company to grow its invested capital more than 8% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 67 (above 67% of alternative investments). But Sales Growth has only a rank of 7, which means that, currently, professionals expect the company to grow less than 93% of its competitors, and Profit Growth is also low at a rank of 8. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Discover Financial Services, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2022	2023	2024	2025
REVENUE GROWTH
REVENUE GROWTH	33	42	9	7
PROFIT GROWTH
PROFIT GROWTH	92	37	6	8
CAPITAL GROWTH
CAPITAL GROWTH	23	77	96	95
STOCK RETURNS
STOCK RETURNS	57	39	71	67
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	61	51	21	27

Last update of Growth Rank: 27-Mar-2025. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Discover Financial Services.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 56 (better than 56% compared with alternatives), the company Discover Financial Services has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Discover Financial Services is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Discover Financial Services and the other two below average. Leverage is at a rank of 66 meaning the company has a below-average debt-to-equity ratio. It has less debt than 66% of its competitors.Refinancing is at a rank of 44, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 56% of its competitors. Liquidity is at a rank of 37, meaning that the company generates less profit to service its debt than 63% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 56 (better than 56% compared with alternatives), Discover Financial Services has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Discover Financial Services are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Discover Financial Services and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2022	2023	2024	2025
LEVERAGE
LEVERAGE	66	64	97	66
REFINANCING
REFINANCING	67	27	51	44
LIQUIDITY
LIQUIDITY	44	53	73	37
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	80	61	98	56

Last update of Safety Rank: 27-Mar-2025. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Discover Financial Services and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2022	2023	2024	2025
ANALYST OPINIONS
ANALYST OPINIONS	n/a	69	40	^new
OPINIONS CHANGE
OPINIONS CHANGE	53	62	91	^new
PRO HOLDINGS
PRO HOLDINGS	91	70	28	^new
MARKET PULSE
MARKET PULSE	64	47	20	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	91	86	33	^new

Last update of Sentiment Rank: 27-Mar-2025. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Discover Financial Services.
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