Should I Buy Discover Financial Services (DFS)? Finance YouTuber Analysis

The YouTuber includes Discover Financial Services despite its sub-2% yield due to its dominance in sales and earnings growth within the financial services industry. DFS reported 60% revenue growth and 41% earnings growth in its recent quarter, yet trades at a very cheap 11 times earnings. It also has the lowest payout ratio in the group, suggesting strong future dividend growth.

“DFS booked 60% Revenue growth and 41% earnings in its most recent quarter and is still trading at just 11 times on a PE basis tremendous tremendously cheap for that kind of growth”

The YouTuber likes DFS for its exposure to the trend of increased credit card spending. He notes its 1.7% dividend yield, which is higher than competitors, and its valuation at 6.7 times earnings, placing it in 'value territory'.

“On that increase in credit spending I like Discover Financial Services ticker DFS for its exposure to that trend.”