Nicholas Financial (NASDAQ:NICK) and Discover Financial Services (NYSE:DFS) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.
Analyst Ratings
This is a summary of current recommendations for Nicholas Financial and Discover Financial Services, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Nicholas Financial | 0 | 0 | 0 | 0 | N/A |
Discover Financial Services | 0 | 9 | 7 | 0 | 2.44 |
Discover Financial Services has a consensus price target of $93.7143, suggesting a potential downside of 5.81%. Given Discover Financial Services' higher possible upside, analysts clearly believe Discover Financial Services is more favorable than Nicholas Financial.
Earnings & Valuation
This table compares Nicholas Financial and Discover Financial Services' revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Nicholas Financial | $62.10 million | 2.13 | $3.47 million | N/A | N/A |
Discover Financial Services | $13.99 billion | 2.18 | $2.96 billion | $9.08 | 10.96 |
Discover Financial Services has higher revenue and earnings than Nicholas Financial.
Profitability
This table compares Nicholas Financial and Discover Financial Services' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Nicholas Financial | 9.12% | 4.90% | 2.29% |
Discover Financial Services | 7.89% | 11.00% | 0.90% |
Institutional and Insider Ownership
38.7% of Nicholas Financial shares are owned by institutional investors. Comparatively, 84.7% of Discover Financial Services shares are owned by institutional investors. 35.7% of Nicholas Financial shares are owned by company insiders. Comparatively, 0.6% of Discover Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Volatility & Risk
Nicholas Financial has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Discover Financial Services has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500.
Summary
Discover Financial Services beats Nicholas Financial on 9 of the 12 factors compared between the two stocks.