DiscoverShares of Discover Financial Services have returned 35% this year. The stock trades for 10.2 times the consensus 2014 earnings estimate of $5.07 a share, among analysts polled by Thomson Reuters. That is a low forward P/E multiple, considering the company's return on equity and the 4% year-over-year growth of its credit card loan portfolio. The consensus 2015 EPS estimate is $5.32. The card lender on Oct. 21 reported third-quarter earnings of $593 million, or $1.20 a share, declining from $637 million, or $1.24 a share, during the third quarter of 2012. A major factor in the year-over-year decline in earnings was that the company added $42 million in loan loss reserves during the most recent quarter, compared to a reserve release of $167 million during 2012. Discover reported a strong return on equity of 23% for the third quarter Oppenheimer analyst Ben Chittenden rates Discover "outperform," with a 12-18 month price target of $58, and in a note to clients following the earnings release called the company his "our top pick in the credit card space." DFS data by YCharts
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