Discover Financial Services (DFS): Today's Key Contributor To Industry Gains

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Discover Financial Services ( DFS) pushed the Financial Services industry higher today making it today's featured financial services winner. The industry as a whole closed the day up 1.2%. By the end of trading, Discover Financial Services rose 76 cents (1.8%) to $43.01 on average volume. Throughout the day, 5.1 million shares of Discover Financial Services exchanged hands as compared to its average daily volume of 5.3 million shares. The stock ranged in a price between $42.51-$43.09 after having opened the day at $42.62 as compared to the previous trading day's close of $42.25. Other companies within the Financial Services industry that increased today were: Consumer Portfolio Services ( CPSS), up 7.1%, Paulson Capital ( PLCC), up 6.7%, Och-Ziff Capital Management Group ( OZM), up 6.1%, and Apollo Global Management ( APO), up 6%.
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Discover Financial Services, a bank holding company, provides direct banking and payment services in the United States. It operates in two segments, Direct Banking and Payment Services. Discover Financial Services has a market cap of $21.46 billion and is part of the financial sector. The company has a P/E ratio of 9.7, below the S&P 500 P/E ratio of 17.7. Shares are up 12.3% year to date as of the close of trading on Monday. Currently there are 14 analysts that rate Discover Financial Services a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates Discover Financial Services as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

On the negative front, WisdomTree Global Real Return Fund ( RRF), down 3.5% and Goldman Sachs Group ( GS), down 1.6%, were all laggards within the financial services industry with Waddell & Reed Financial ( WDR) being today's financial services industry laggard.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the financial services industry could consider Financial Select Sector SPDR ( XLF) while those bearish on the financial services industry could consider Proshares Short Financials ( SEF).

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