Getting the Balance Right
So what’s the ideal construction? Would maintaining a simple 50/50 split between risk-reducing and return-seeking assets do the trick?
In October 2017, Discover Financial Services (DFS) is being covered by 24 analysts. Of those, only one analyst has rated DFS a “strong sell,” and none of them have given it a “sell” rating.
Discover Financial Services’ (DFS) banking services have been ranked second in terms of customer satisfaction, according to a survey conducted by J.D. Power in August 2017.
Discover Financial Services (DFS) generates the majority of its net income from interest income, which is part of its direct banking division.
Discover Financial Services (DFS) has seen strong growth in loans in 2Q17 compared to 2Q16. For credit card loans, it saw an 8.0% growth in 2Q17 compared to 2Q16.
Discover Financial Services (DFS) could see an increase in volumes in 3Q17, mainly due to Hurricanes Harvey and Irma.
Mastercard (MA) is covered by 36 analysts. Fifteen of those analysts, or 41.6%, have given MA stock a “buy” rating.
In 1H16, Mastercard (MA) used net cash of $2.3 billion for its financing purposes. In 1H17, it was $2.5 billion for the same purpose.
Mastercard (MA) currently has a one-year price estimate of $145 per share, which represents a rise of 2.5% from the stock’s current trading price.
Mastercard (MA) reported total assets of $19.8 billion as of June 30, 2017, and $18.7 billion as of December 31, 2016.
In 1H16, Mastercard (MA) reported net income of $1.9 billion. In 1H17, it was $2.3 billion, reflecting a substantial rise of 16.5%.
Mastercard (MA) incurred total operating expenses of $2.4 billion in 1H16. In 1H17, its total operating expenses were $2.6 billion, a rise of 9.0%.
Mastercard (MA) witnessed a substantial rise in its net revenues in 1H17 compared to 1H16. It reported net revenues of $5.8 billion in 1H17.
Discover Financial reported cash and cash equivalents of ~$11.9 billion on December 31, 2016, and $12.95 billion on June 30, 2017.
Of the 23 analysts covering Discover Financial Services (DFS) stock, eight analysts gave “strong buy” ratings on the stock, and another eight analysts rated the stock as a “buy.”
Discover Financial reported total loans of $78.0 billion in 2Q17, which reflects an increase of 8% on a year-over-year basis.
Discover Financial Services (DFS) is expected to declare total dividends of $1.27 per share in 2017, an ~9.5% increase from its total dividends of $1.16 per share in 2016.
Discover Financial Services (DFS) reported a net interest margin of ~10.1% on June 30, 2017.
Discover Financial’s employee compensation expenses rose 7% in 1H17 compared to 1H16.
In 2Q17, Discover reported Information Processing & Communications expenses of $77 million compared to $89 million in 2Q16, reflecting a 13% decline.