2 Credit Card Stocks Hitting 52-Week Highs

These stocks hit 52-week highs on Wednesday.

Author:: Alexandra Zendrian
Publish date:: Feb 15, 2012 4:07 PM EST

NEW YORK (

TheStreet

) - Shares of these two credit card companies hit 52-week highs on Wednesday:

Visa

(V) - Get Report

and

Discover Financial

(DFS) - Get Report

Both of these stocks get buy ratings from

TheStreet Ratings

Visa

Visa reported fiscal first-quarter earnings of $1.03 billion, or $1.49 a share, last week, beating Wall Street's estimate for a profit of $1.45 a share.

Of Visa's report, Morgan Keegan analysts wrote in a Feb. 9 report that: "Higher pricing offset modestly lower volumes; A higher tax rate prevented a bigger beat of Street expectations."

Shares of Visa hit a 52-week high of $117.18 on Wednesday. The stock's 52-week low of $26.50 was set on March 2.

Visa's stock trades at a forward price-to-earnings ratio of 16.6X; the average for consumer finance companies is 10.6X. For comparison,

American Express

(AXP) - Get Report

and

Mastercard

(MA) - Get Report

both have lower forward P/Es of 11.1X and 15.4X respectively.

Of the 40 analysts who cover Visa, 32 rate the stock at buy and eight are at hold.

TheStreet Ratings

gives Visa and A grade with a buy rating and has a

$137.51

price target on the shares. The stock has risen 13.56% year to date.

Discover Financial

The credit card company said Wednesday late payments went down in January, according to

The Associated Press

. Approximately 2.31% of its balances were late by more than 30 days, the

said.

"We are entering into what we call the 'happy season' for consumer lenders: seasonally lower losses and gradually growing spend," Sterne Agee analysts wrote in a Jan. 27 report. "The company has addressed the sales practice issues and made required product modification and we do not see any long-term impact here on our 2013 EPS estimate. We would be buyers of this stock."

Shares of Discover Financial hit a 52-week high of $29.35 on Wednesday. The stock's 52-week low of $20.51 was set on Aug. 8.

Discover Financial's forward P/E is 8.6X; the average for consumer financial companies is 10.6X. For comparison,

Capital One

(COF) - Get Report

has a lower forward P/E of 7.4X and

Western Union's

(WU) - Get Report

has a forward P/E of 9.1X.

Seventeen of the 26 analysts who cover Discover Financial rate the stock at buy; nine have hold ratings.

TheStreet Ratings

gives Discover Financial an A- grade with a buy rating and has a

$37.92