Discover Financial Services (Discover Financial Services) Return-on-Tangible-Equity

: 10.87% (As of Dec. 2023)

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Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Discover Financial Services's annualized net income for the quarter that ended in Dec. 2023 was $1,552 Mil. Discover Financial Services's average shareholder tangible equity for the quarter that ended in Dec. 2023 was $14,277 Mil. Therefore, Discover Financial Services's annualized Return-on-Tangible-Equity for the quarter that ended in Dec. 2023 was 10.87%.

The historical rank and industry rank for Discover Financial Services's Return-on-Tangible-Equity or its related term are showing as below:

DFS' s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 10.38 Med: 22.04 Max: 45.78
Current: 16.13

During the past 13 years, Discover Financial Services's highest Return-on-Tangible-Equity was 45.78%. The lowest was 10.38%. And the median was 22.04%.

DFS's Return-on-Tangible-Equity is ranked better than
86.51% of 504 companies
in the Credit Services industry
Industry Median: 7.105 vs DFS: 16.13

Discover Financial Services Return-on-Tangible-Equity Historical Data

The historical data trend for Discover Financial Services's Return-on-Tangible-Equity can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Discover Financial Services Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Return-on-Tangible-Equity

26.68

10.38

45.78

32.11

20.51

Discover Financial Services Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Return-on-Tangible-Equity																27.74	26.06	19.81	10.87	8.49

Competitive Comparison

For the Credit Services subindustry, Discover Financial Services's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Discover Financial Services Return-on-Tangible-Equity Distribution

For the Credit Services industry and Financial Services sector, Discover Financial Services's Return-on-Tangible-Equity distribution charts can be found below:

* The bar in red indicates where Discover Financial Services's Return-on-Tangible-Equity falls into.

Discover Financial Services Return-on-Tangible-Equity Calculation

Discover Financial Services's annualized Return-on-Tangible-Equity for the fiscal year that ended in Dec. 2023 is calculated as

Return-on-Tangible-Equity	=	Net Income	/	( (Total Tangible Equity	+	Total Tangible Equity)	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	Net Income	/	( (Total Stockholders Equity - Intangible Assets	+	Total Stockholders Equity - Intangible Assets )	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	2940	/	( (14089	+	14573 )	/ 2 )
	=	2940	/	14331
	=	20.51 %

Discover Financial Services's annualized Return-on-Tangible-Equity for the quarter that ended in Dec. 2023 is calculated as

Return-on-Tangible-Equity	=	Net Income	/	( (Total Tangible Equity	+	Total Tangible Equity)	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	Net Income	/	( (Total Stockholders Equity - Intangible Assets	+	Total Stockholders Equity - Intangible Assets)	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	1552	/	( (13981	+	14573)	/ 2 )
	=	1552	/	14277
	=	10.87 %

In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data, the net income data used here is four times the quarterly (Dec. 2023) net income data. Return-on-Tangible-Equity is displayed in the 10-year financial page.

Discover Financial Services (NYSE:DFS) Return-on-Tangible-Equity Explanation

Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.

Be Aware

Net Income is used.

Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.

Discover Financial Services Return-on-Tangible-Equity Related Terms

Thank you for viewing the detailed overview of Discover Financial Services's Return-on-Tangible-Equity provided by GuruFocus.com. Please click on the following links to see related term pages.

Discover Financial Services (Discover Financial Services) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » Discover Financial Services (NYSE:DFS) » Definitions » Return-on-Tangible-Equity

Comparable Companies

Traded in Other Exchanges

DC7:Germany DC7:Germany

Address

2500 Lake Cook Road, Riverwoods, IL, USA, 60015

Website

https://www.discover.com

Discover Financial Services is a bank operating in two distinct segments: direct banking and payment services. The company issues credit and debit cards and provides other consumer banking products including deposit accounts, students loans, and other personal loans. It also operates the Discover, Pulse, and Diners Club networks. The Discover network is the fourth-largest payment network in the United States as ranked by overall purchase volume, and Pulse is one of the largest ATM networks in the country.

Executives

Kathy Lonowski	director	2500 LAKE COOK ROAD, RIVERWOODS IL 60015
Michael Shepherd	director	567 HALE STREET, PALO ALTO CA 94301
Jason Strle	officer: EVP, Chief Information Officer	2500 LAKE COOK ROAD, RIVERWOODS IL 60015
Jason P. Hanson	officer: EVP, Pres. - Payment Services	2500 LAKE COOK ROAD, RIVERWOODS IL 60015
Daniela O'leary-gill	director	2500 LAKE COOK ROAD, RIVERWOODS IL 60015
Beverley A Sibblies	director	2700 SANDERS ROAD, PROSPECT HEIGHTS IL 60070
Robert Andrew Eichfeld	officer: EVP - Chief HR & Admin Officer	2500 LAKE COOK ROAD, RIVERWOODS IL 60015
Carlos Minetti	officer: EVP, Pres. - Consumer Banking	2500 LAKE COOK ROAD, RIVERWOODS IL 60015
Hope Mehlman	officer: EVP, Chief Legal Officer & GC	2500 LAKE COOK ROAD, RIVERWOODS IL 60015
Michael H Moskow	director	444 WEST LAKE STREET, STE. 4700, CHICAGO IL 60606
John B Owen	director	REGIONS FINANCIAL CORPORATION, 1900 5TH AVENUE NORTH, 21ST FLOOR, BIRMINGHAM AL 35203
John Greene	officer: EVP & Chief Financial Officer	51 LIME STREET, LONDON X0 EC3M 7DQ
Shifra Kolsky	officer: SVP, Controller and CAO	2500 LAKE COOK ROAD, RIVERWOODS IL 60015
Michael E Roemer	officer: EVP, Chief Risk Officer	AMERICAN INTERNATIONAL GROUP, INC., 70 PINE STREET, NEW YORK NY 10270
Daniel Peter Capozzi	officer: EVP, Pres - Cr Ops & Dec Mgmt	2500 LAKE COOK ROAD, RIVERWOODS IL 60015