When it comes to credit-card businesses, I'm partial to Visa, Inc. (V). Even so, I have to give my respect today to Discover Financial Services (DFS). At the time of this writing, the stock was up 4.5% to $23.26. Volume was strong. Furthermore, a new 52-week high of $23.46 was recorded earlier in the day (by the time this is published, it's possible the high quote will be different).
The stock has been a good holding over the last twelve months. The 52-week low is $12.11, and the one-year chart shows strength. This name is heading for a double. Is it too late to buy?
In a previous piece, I expressed some bearish reservations on this idea. The market ignored me (as it is wont to do). To those who took a chance on the company, congratulations.
The current fundamentals of the business look appealing. According to Reuters, Discover Financial Services made 84 cents per share during the fiscal first quarter; a loss of 22 cents per share was booked in last year's similar frame. What a nice difference.
The bigger news, though, centers on the dividend. The quarterly payment was increased four pennies to six cents per share.
Again, I like Visa better than Discover Financial Services, but I have no choice but to admit that the latter seems to have a significant quantity of bullish sentiment surrounding it. I believe the shares will be heading for the $30 mark over the next several months and thus will be an interesting trade. Considering current conditions, I must point out that buying a name like this does come with a lot of risk. Still, reserve some research time for the equity.
Disclosure: I don't own any company mentioned; positions can change without notice.