NEW YORK (
) -- "We believe resumption of receivables growth, while maintaining strong credit performance could benefit all issuers, particularly those with low valuations which may enable multiple expansion."
Those words from FBR analyst Scott Valentin are music to the ears of investors holding shares of
Discover Financial Services
(DFS - Get Report)
Capital One Financial
(COF - Get Report)
, which trade at significant discounts to other "purer play" credit card lenders.
Credit card lenders report numbers for their portfolio and securitized card loans each month. The "master trust" data for the securitized loans shows a continued significant decline in overall loan balances, as U.S. consumers continue to pay down card balances at a historically elevated rate.
But nearly all of the big card lenders showed year-over-year growth of over 1% for their on-balance-sheet credit card portfolios during October, which Valentin highlighted in a note to clients on Monday. This is a great thing for investors considering how profitable credit card lending can be, especially during a time of stellar loan quality. In addition to Discover and Capital One, this group includes
Bank of America