We View Discover as a High-Return but Low-Growth Company
Narrow-moat Discover Financial Services produced few surprises in the third quarter. Total loans grew 2.4% from the previous quarter to $83.9 billion, representing year-over-year growth of 7.8%. Revenue net of interest expense climbed 4.7% as Discover benefited primarily from higher loan balances and stable credit provision. Despite this quarter’s loan growth, credit provisions were flat with the previous quarter, enabling Discover to increase earnings faster than revenue. For the third quarter,...Discover Financial Services is a bank holding, as well as a financial holding company. The company manages its business activities in two segments: Direct Banking, which includes consumer banking and lending products, specifically Discover-branded credit cards issued to individuals on the Discover Network and other consumer banking products and services, including student loans, personal loans, home equity loans, and deposit products; and Payment Services, which includes the PULSE network, Diners Club International and its Network Partners business, which provides payment transaction processing and settlement services on the Discover Network.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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