Fintel reports that on August 24, 2023, Wolfe Research upgraded their outlook for Discover Financial Services (NYSE:DFS) from Peer Perform to Outperform.

Analyst Price Forecast Suggests 36.39% Upside

As of August 2, 2023, the average one-year price target for Discover Financial Services is 120.83. The forecasts range from a low of 99.99 to a high of $143.85. The average price target represents an increase of 36.39% from its latest reported closing price of 88.59.

See our leaderboard of companies with the largest price target upside.

The projected annual revenue for Discover Financial Services is 14,658MM, an increase of 35.85%. The projected annual non-GAAP EPS is 14.06.

Discover Financial Services Declares $0.70 Dividend

On July 19, 2023 the company declared a regular quarterly dividend of $0.70 per share ($2.80 annualized). Shareholders of record as of August 24, 2023 will receive the payment on September 7, 2023. Previously, the company paid $0.70 per share.

At the current share price of $88.59 / share, the stock’s dividend yield is 3.16%.

Looking back five years and taking a sample every week, the average dividend yield has been 2.33%, the lowest has been 1.39%, and the highest has been 6.60%. The standard deviation of yields is 0.73 (n=236).

The current dividend yield is 1.15 standard deviations above the historical average.

Additionally, the company’s dividend payout ratio is 0.18. 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 0.59%, demonstrating that it has increased its dividend over time.

What is the Fund Sentiment?

There are 1756 funds or institutions reporting positions in Discover Financial Services. This is an increase of 4 owner(s) or 0.23% in the last quarter. Average portfolio weight of all funds dedicated to DFS is 0.25%, a decrease of 1.40%. Total shares owned by institutions decreased in the last three months by 2.82% to 247,932K shares. The put/call ratio of DFS is 0.71, indicating a bullish outlook.

What are Other Shareholders Doing?

Capital World Investors holds 21,119K shares representing 8.45% ownership of the company. In it’s prior filing, the firm reported owning 21,267K shares, representing a decrease of 0.70%. The firm increased its portfolio allocation in DFS by 9.25% over the last quarter.

VTSMX – Vanguard Total Stock Market Index Fund Investor Shares holds 8,101K shares representing 3.24% ownership of the company. In it’s prior filing, the firm reported owning 8,292K shares, representing a decrease of 2.36%. The firm decreased its portfolio allocation in DFS by 8.86% over the last quarter.

AWSHX – WASHINGTON MUTUAL INVESTORS FUND holds 7,370K shares representing 2.95% ownership of the company. In it’s prior filing, the firm reported owning 6,760K shares, representing an increase of 8.28%. The firm decreased its portfolio allocation in DFS by 2.97% over the last quarter.

VFINX – Vanguard 500 Index Fund Investor Shares holds 6,229K shares representing 2.49% ownership of the company. In it’s prior filing, the firm reported owning 6,316K shares, representing a decrease of 1.40%. The firm decreased its portfolio allocation in DFS by 7.59% over the last quarter.

VIMSX – Vanguard Mid-Cap Index Fund Investor Shares holds 6,118K shares representing 2.45% ownership of the company. In it’s prior filing, the firm reported owning 6,363K shares, representing a decrease of 4.01%. The firm decreased its portfolio allocation in DFS by 5.98% over the last quarter.

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

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