Discover Financial Services (NYSE:DFS) and Green Dot (NYSE:GDOT) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, valuation, earnings and dividends.
Analyst Recommendations
This is a summary of current ratings for Discover Financial Services and Green Dot, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Discover Financial Services | 0 | 8 | 8 | 0 | 2.50 |
Green Dot | 0 | 6 | 5 | 0 | 2.45 |
Discover Financial Services currently has a consensus target price of $93.00, suggesting a potential downside of 9.06%. Green Dot has a consensus target price of $54.8182, suggesting a potential upside of 17.23%. Given Green Dot's higher probable upside, analysts plainly believe Green Dot is more favorable than Discover Financial Services.
Profitability
This table compares Discover Financial Services and Green Dot's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Discover Financial Services | 7.89% | 11.00% | 0.90% |
Green Dot | 4.01% | 7.73% | 2.43% |
Risk and Volatility
Discover Financial Services has a beta of 1.8, indicating that its share price is 80% more volatile than the S&P 500. Comparatively, Green Dot has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.
Valuation & Earnings
This table compares Discover Financial Services and Green Dot'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 | $13.99 billion | 2.24 | $2.96 billion | $9.08 | 11.26 |
Green Dot | $1.11 billion | 2.28 | $99.90 million | $2.33 | 20.07 |
Discover Financial Services has higher revenue and earnings than Green Dot. Discover Financial Services is trading at a lower price-to-earnings ratio than Green Dot, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
84.7% of Discover Financial Services shares are owned by institutional investors. Comparatively, 90.0% of Green Dot shares are owned by institutional investors. 0.6% of Discover Financial Services shares are owned by insiders. Comparatively, 4.8% of Green Dot shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
Discover Financial Services beats Green Dot on 8 of the 14 factors compared between the two stocks.