Discover Financial Services (DFS): Industry & Business Stock Drivers
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Transcript of Discover Financial Services (DFS): Industry & Business Stock Drivers
Discover Financial Services (DFS): Industry & Business Stock
Drivers Earning Drivers
Paper to electronic payments Growths in credit spending Expansion in personal and student
loans
Business 1. 15 billion market cap company
purely focused on direct banking & payment service
2. Leveraging discover card brand in attracting more quality customers
3. Attractive customer base Average Age: 44; Average Household
Income: $108,000
75% are married, have attended college OR have a house
4. 10% limited direct exposure to Europe
3Q 2009 to 3Q 2011
Valuation & Technical
Low Valuation Trailing P/B of 1.74x; Trailing
ROE of 29.9%; PEG of 0.71 American Express: P/B of
3.05x and ROE of 27.48%
Attractive Technical Just broke out of a price
consolidation phase
Outperformed AMEX Financial, MasterCard, VISA and S&P 500 Index over the past three years
Initial target price of around $35: upside of 30%