DFS

Discover Financial Services

Finance/Real Estate


Presented:09/17/2020
Price:$59.54
Cap:$18.24B
Current Price:$147.14
Cap:$36.94B

Presented

Date09/17/2020
Price$59.54
Market Cap$18.24B
Ent Value$24.41B
P/E Ratio18.87x
Book Value$28.02
Div Yield2.96%
Shares O/S306.42M
Ave Daily Vol3,552,356
Short Int2.54%

Current

Price$147.14
Market Cap$36.94B
Discover Financial Services is a holding company, which engages in the provision of direct banking and payment services. It operates through the Direct Banking and Payment Services segments. The Direct Banking segment offers Discover-branded credit cards issued to individuals and small businesses on the Discover Network; and consumer banking products and services, including private student loans, personal loans, home equity loans, and deposit products. The Payment Services segment includes PULSE, Diners Club, and the company's network partners business, which includes credit, debit, and prepaid cards issued on the Discover Network by third parties. The company was founded in 1986 and is headquartered in Riverwoods, IL.

Publicly traded companies mentioned herein: Ally Financial Inc (ALLY), American Express Company (AXP), Bank of America Corp (BAC), Capital One Financial Corp (COF), Discover Financial Services (DFS), JPMorgan Chase & Co (JPM), Synchrony Financial (SYF) 

Highlights

The presenter is long shares of Discover Financial Services (DFS), based on a solid consumer credit backdrop and what he believes to be an underappreciation for the franchise. While he believes that the perception of consumer credit is good, the number of investors who agree and are willing to make an investment on that sentiment is small. Despite low interest in these types of stocks, all the commentary on consumer credit from Bank of America, JPMorgan, Capital One, Discover, and Ally have been positive, post stimulus rolling off. In addition, he thinks DFS is a better franchise than a lot of people appreciate. Along with AMEX, it's right up there in credit card rankings as rated by J.D. Power, and he believes it has similar brand recognition. 

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Idea Discussion

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