Definitive Analysis | Institutional-Grade Financial Research
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Discover Financial Services (DFS)

Company Dividend Discount ModelIndustry: Financial - Credit ServicesSector: Financial Services

Valuation Snapshot

Stable Growth$320.21 - $631.97$442.79
Multi-Stage$286.04 - $312.99$299.27
Blended Fair Value$371.03
Current Price$170.70
Upside117.36%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS6.12%5.14%3.072.992.802.532.292.282.202.102.052.05
YoY Growth--2.53%6.97%10.53%10.42%0.52%3.80%4.74%2.53%-0.19%10.28%
Dividend Yield--1.80%2.31%2.83%2.30%2.41%6.39%2.99%2.92%2.99%4.03%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)4,795.00
(-) Cash Dividends Paid (M)771.00
(=) Cash Retained (M)4,024.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)959.00599.38359.63
Cash Retained (M)4,024.004,024.004,024.00
(-) Cash Required (M)-959.00-599.38-359.63
(=) Excess Retained (M)3,065.003,424.633,664.38
(/) Shares Outstanding (M)251.25251.25251.25
(=) Excess Retained per Share12.2013.6314.58
LTM Dividend per Share3.073.073.07
(+) Excess Retained per Share12.2013.6314.58
(=) Adjusted Dividend15.2716.7017.65
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate4.12%5.12%6.12%
Fair Value$320.21$442.79$631.97
Upside / Downside87.59%159.40%270.22%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)4,795.005,040.305,298.155,569.195,854.106,153.586,338.19
Payout Ratio16.08%30.86%45.65%60.43%75.22%90.00%92.50%
Projected Dividends (M)771.001,555.612,418.483,365.564,403.215,538.235,862.83

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate4.12%5.12%6.12%
Year 1 PV (M)1,412.551,426.121,439.68
Year 2 PV (M)1,994.112,032.602,071.46
Year 3 PV (M)2,519.812,593.112,667.83
Year 4 PV (M)2,993.533,110.213,230.26
Year 5 PV (M)3,418.913,586.293,760.15
PV of Terminal Value (M)59,527.9662,442.1565,469.36
Equity Value (M)71,866.8875,190.4778,638.74
Shares Outstanding (M)251.25251.25251.25
Fair Value$286.04$299.27$312.99
Upside / Downside67.57%75.32%83.36%

High-Yield Dividend Screener

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