Comparing Discover Financial Services (DFS) and Enova International (ENVA)

Discover Financial Services (NYSE: DFS) and Enova International (NYSE:ENVA) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Earnings and Valuation

This table compares Discover Financial Services and Enova International’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 $11.55 billion 2.35 $2.10 billion $5.98 13.02
Enova International $843.74 million 1.38 $29.24 million $1.15 29.87

Discover Financial Services has higher revenue and earnings than Enova International. Discover Financial Services is trading at a lower price-to-earnings ratio than Enova International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Discover Financial Services and Enova International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Discover Financial Services 18.43% 22.79% 2.43%
Enova International 4.78% 20.25% 5.21%

Risk and Volatility

Discover Financial Services has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500. Comparatively, Enova International has a beta of 2.81, indicating that its share price is 181% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Discover Financial Services and Enova International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Discover Financial Services 0 8 14 1 2.70
Enova International 0 0 4 0 3.00

Discover Financial Services currently has a consensus price target of $85.40, indicating a potential upside of 9.72%. Enova International has a consensus price target of $27.00, indicating a potential downside of 21.40%. Given Discover Financial Services’ higher possible upside, research analysts clearly believe Discover Financial Services is more favorable than Enova International.

Institutional & Insider Ownership

87.6% of Discover Financial Services shares are owned by institutional investors. Comparatively, 91.1% of Enova International shares are owned by institutional investors. 0.8% of Discover Financial Services shares are owned by insiders. Comparatively, 5.6% of Enova International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Discover Financial Services pays an annual dividend of $1.40 per share and has a dividend yield of 1.8%. Enova International does not pay a dividend. Discover Financial Services pays out 23.4% of its earnings in the form of a dividend. Discover Financial Services has raised its dividend for 7 consecutive years.

Summary

Discover Financial Services beats Enova International on 11 of the 18 factors compared between the two stocks.

About Discover Financial Services

Discover Financial Services, through its subsidiaries, operates as a direct banking and payment services company in the United States. The Direct Banking segment offers Discover-branded credit cards to individuals; and other consumer products and services, including private student loans, personal loans, home equity loans, and other consumer lending, as well as deposit products, such as certificates of deposit, money market accounts, savings accounts, checking accounts, and individual retirement arrangement certificates of deposit. The Payment Services segment operates the Discover Network, which processes transactions for Discover-branded credit cards, and provides payment transaction processing and settlement services; and PULSE network, an electronic funds transfer network that provides financial institutions issuing debit cards on the PULSE network with access to automated teller machines and point-of-sale terminals. This segment also operates Diners Club International, a payments network that issues Diners Club branded charge cards and provides card acceptance services. The company was incorporated in 1960 and is based in Riverwoods, Illinois.

About Enova International

Enova International, Inc., a technology and analytics company, provides online financial services. The company offers short-term consumer loans; line of credit accounts; installment loans; receivables purchase agreements; CSO programs, including credit-related services, such as arranging loans with independent third-party lenders and assisting in the preparation of loan applications and loan documents; and bank programs comprising technology, loan servicing, and marketing services to the bank, as well as Enova Decisions, an analytics as a service that enables companies to take decisions about their customers through existing tools and technologies. It offers loans to consumers under the names CashNetUSA and NetCredit in the United States; QuickQuid, Pounds to Pocket, and On Stride Financial names in the United Kingdom; and Simplic name in Brazil. The company also offers financing to small businesses under the names Headway Capital and The Business Backer in the United States. Enova International, Inc. was founded in 2011 and is headquartered in Chicago, Illinois.

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