Discover Financial Services (DFS) Hits New Lifetime High

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Discover Financial Services ( DFS) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Discover Financial Services as such a stock due to the following factors:

  • DFS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $149.9 million.
  • DFS has traded 4,442 shares today.
  • DFS is trading at a new lifetime high.

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More details on DFS:

Discover Financial Services, a bank holding company, provides a range of financial products and services in the United States. The company operates in two segments, Direct Banking and Payment Services. The stock currently has a dividend yield of 1.5%. DFS has a PE ratio of 12.3. Currently there are 11 analysts that rate Discover Financial Services a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Discover Financial Services has been 2.1 million shares per day over the past 30 days. Discover Financial Services has a market cap of $29.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.93 and a short float of 0.8% with 2.34 days to cover. Shares are up 13.3% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant 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 good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • DFS's revenue growth has slightly outpaced the industry average of 0.1%. Since the same quarter one year prior, revenues slightly increased by 4.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • DISCOVER FINANCIAL SVCS INC has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DISCOVER FINANCIAL SVCS INC increased its bottom line by earning $4.96 versus $4.46 in the prior year. This year, the market expects an improvement in earnings ($5.32 versus $4.96).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Consumer Finance industry average. The net income increased by 7.0% when compared to the same quarter one year prior, going from $602.00 million to $644.00 million.
  • Net operating cash flow has slightly increased to $642.00 million or 7.89% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -38.82%.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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