On February 8, 2023, Morgan Stanley downgraded their outlook for Discover Financial Services from Overweight to Equal-Weight.

Analyst Price Forecast Suggests 0.29% Upside

As of February 8, 2023, the average one-year price target for Discover Financial Services is $118.17. The forecasts range from a low of $97.97 to a high of $132.30. The average price target represents an increase of 0.29% from its latest reported closing price of $117.83.

The projected annual revenue for Discover Financial Services is $14,658MM, an increase of 4.97%. The projected annual EPS is $14.06, a decrease of 9.51%.

Discover Financial Services Declares $0.60 Dividend

Discover Financial Services said on January 18, 2023 that its board of directors declared a regular quarterly dividend of $0.60 per share ($2.40 annualized). Shareholders of record as of February 22, 2023 will receive the payment on March 9, 2023. Previously, the company paid $0.60 per share.

At the current share price of $117.83 / share, the stock’s dividend yield is 2.04%. Looking back five years and taking a sample every week, the average dividend yield has been 2.26%, the lowest has been 1.39%, and the highest has been 6.60%. The standard deviation of yields is 0.73 (n=237).

The current dividend yield is 0.31 standard deviations below the historical average.

Additionally, the company’s dividend payout ratio is 0.15. The payout ratio tells us how much of a company’s income is paid out in dividends. A payout ratio of one (1.0) means 100% of the company’s income is paid in a dividend. A payout ratio greater than one means the company is dipping into savings in order to maintain its dividend – not a healthy situation. Companies with few growth prospects are expected to pay out most of their income in dividends, which typically means a payout ratio between 0.5 and 1.0. Companies with good growth prospects are expected to retain some earnings in order to invest in those growth prospects, which translates to a payout ratio of zero to 0.5.

The company’s 3-Year dividend growth rate is 0.36%, demonstrating that it has increased its dividend over time.

What are large shareholders doing?

Capital World Investors holds 17,689,958 shares representing 6.63% ownership of the company. In it’s prior filing, the firm reported owning 11,552,555 shares, representing an increase of 34.69%. The firm increased its portfolio allocation in DFS by 55.56% over the last quarter.

VTSMX – Vanguard Total Stock Market Index Fund Investor Shares holds 8,155,329 shares representing 3.05% ownership of the company. In it’s prior filing, the firm reported owning 8,273,571 shares, representing a decrease of 1.45%. The firm decreased its portfolio allocation in DFS by 1.23% over the last quarter.

AWSHX – WASHINGTON MUTUAL INVESTORS FUND holds 6,602,784 shares representing 2.47% ownership of the company. In it’s prior filing, the firm reported owning 8,911,926 shares, representing a decrease of 34.97%. The firm decreased its portfolio allocation in DFS by 21.18% over the last quarter.

Capital International Investors holds 6,346,397 shares representing 2.38% ownership of the company. In it’s prior filing, the firm reported owning 15,513,856 shares, representing a decrease of 144.45%. The firm decreased its portfolio allocation in DFS by 57.83% over the last quarter.

VIMSX – Vanguard Mid-Cap Index Fund Investor Shares holds 6,294,735 shares representing 2.36% ownership of the company. In it’s prior filing, the firm reported owning 6,467,931 shares, representing a decrease of 2.75%. The firm decreased its portfolio allocation in DFS by 2.18% over the last quarter.

Fund Sentiment

There are 1735 funds or institutions reporting positions in Discover Financial Services. This is a decrease of 24 owner(s) or 1.36%.

Average portfolio weight of all funds dedicated to US:DFS is 0.2565%, a decrease of 1.9740%. Total shares owned by institutions decreased in the last three months by 2.65% to 269,340K shares.

Discover Financial Services Background Information
(This description is provided by the company.)

Discover Financial Servicesis a digital banking and payment services company with one of the most trusted brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America’s cash rewards pioneer, and offers private student loans, personal loans, home loans, checking and savings accounts and certificates of deposit through its banking business. It operates the Discover Global Network comprised of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation’s leading ATM/debit networks; and Diners Club International, a global payments network with acceptance around the world.

This article originally appeared on Fintel

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.