Financial Contrast: Discover Financial Services (DFS) and IEG (IEGH)

Discover Financial Services (NYSE:DFS) and IEG (OTC:IEGH) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Analyst Ratings

This is a summary of current recommendations and price targets for Discover Financial Services and IEG, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Discover Financial Services 0 6 12 1 2.74
IEG 0 0 1 0 3.00



Discover Financial Services currently has a consensus target price of $86.77, suggesting a potential upside of 40.37%. IEG has a consensus target price of $0.80, suggesting a potential upside of 196.30%. Given IEG’s stronger consensus rating and higher possible upside, analysts clearly believe IEG is more favorable than Discover Financial Services.

Earnings & Valuation

This table compares Discover Financial Services and IEG’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Discover Financial Services $11.55 billion 1.80 $2.10 billion $5.98 10.34
IEG N/A N/A N/A N/A N/A

Discover Financial Services has higher revenue and earnings than IEG.

Profitability

This table compares Discover Financial Services and IEG’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Discover Financial Services 19.51% 25.49% 2.57%
IEG N/A N/A N/A

Insider and Institutional Ownership

86.0% of Discover Financial Services shares are owned by institutional investors. Comparatively, 0.1% of IEG shares are owned by institutional investors. 0.8% of Discover Financial Services shares are owned by company insiders. Comparatively, 39.5% of IEG shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Discover Financial Services pays an annual dividend of $1.60 per share and has a dividend yield of 2.6%. IEG pays an annual dividend of $0.01 per share and has a dividend yield of 3.7%. Discover Financial Services pays out 26.8% of its earnings in the form of a dividend. Discover Financial Services has increased its dividend for 7 consecutive years.

Summary

Discover Financial Services beats IEG on 8 of the 13 factors compared between the two stocks.

About Discover Financial Services

Discover Financial Services, through its subsidiaries, operates as a direct banking and payment services company in the United States. The Direct Banking segment offers Discover-branded credit cards to individuals; and other consumer products and services, including private student loans, personal loans, home equity loans, and other consumer lending, as well as deposit products, such as certificates of deposit, money market accounts, savings accounts, checking accounts, and individual retirement arrangement certificates of deposit. The Payment Services segment operates the Discover Network, which processes transactions for Discover-branded credit cards, and provides payment transaction processing and settlement services; and PULSE network, an electronic funds transfer network that provides financial institutions issuing debit cards on the PULSE network with access to automated teller machines and point-of-sale terminals. This segment also operates Diners Club International, a payments network that issues Diners Club branded charge cards and provides card acceptance services. The company was incorporated in 1960 and is based in Riverwoods, Illinois.

About IEG

IEG Holdings Corporation, a consumer finance company, provides online unsecured consumer loans to individuals. It offers loans for debt consolidation, medical expenses, home improvements, auto repairs, purchases, and discretionary spending. The company provides its unsecured consumer loans to residents under the Mr. Amazing Loans brand name through its mramazingloans.com Website in 19 states, including Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah, and Virginia. IEG Holdings Corporation was founded in 1999 and is headquartered in Las Vegas, Nevada.

Receive News & Ratings for Discover Financial Services Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Discover Financial Services and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply