Discover Financial Services (DFS): Today's Featured Financial Services Laggard

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 lower today making it today's featured Financial Services laggard. The industry as a whole closed the day down 0.4%. By the end of trading, Discover Financial Services fell $0.52 (-1.1%) to $45.54 on light volume. Throughout the day, 3,094,526 shares of Discover Financial Services exchanged hands as compared to its average daily volume of 5,038,900 shares. The stock ranged in price between $45.39-$46.08 after having opened the day at $46.06 as compared to the previous trading day's close of $46.06. Other companies within the Financial Services industry that declined today were: INTL FCStone ( INTL), down 8.2%, CIFC ( CIFC), down 6.3%, CIFC ( DFR), down 6.3% and Atlanticus Holdings ( ATLC), down 5.8%.
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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 $22.5 billion and is part of the financial sector. The company has a P/E ratio of 10.3, below the S&P 500 P/E ratio of 17.7. Shares are up 19.5% year to date as of the close of trading on Wednesday. Currently there are 14 analysts that rate Discover Financial Services a buy, no analysts rate it a sell, and 4 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 revenue growth, solid stock price performance, growth in earnings per share, increase in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

On the positive front, Ladenburg Thalman Financial Services ( LTS), down 4.3%, Nomura Holdings ( NMR), down 4.2%, Dominion Resources Black Warrior ( DOM), down 3.8% and Lazard ( LAZ), down 2.4%.

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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