Discover, the well-known financial services company, is a stock that some investors are keeping an eye on for 2018. The company’s stock currently trades at $75.00 a share with a market capitalization of $28 billion. Investors point out that the company’s price-to-sales ratio is 2.81, which is four times lower than the industry average of 8.61. When a company has a low price-to-sales ratio, investors consider it an attractive investment.
Investors also point out that over the past five years, Discover’s sales have increased by an average of five percent annually, and it earnings-per-share growth is at a steady 5.3 percent. Investors also note that the company pays its preferred stock shareholders an average dividend of 21 percent for the trailing twelve months with a dividend yield of 1.8 percent. Forecasts show the company will average dividend growth rate of 42 percent over the next five years.
Analysts who cover Discover Financial have a median price target of $72.00 per share with an estimated high of $88.00 for the next 12 months. Analysts also give Discover a buy rating for January, which is the same rating the company received in December.
Another stock investors are watching is The Michael’s Companies. The stock is up 6.8 percent year-to-date, and the company’s price-to-sales ratio is at a solid 0.76 percent compared to the industry average of 2.73 percent.
The company saw its revenues increase by 5 percent, with an average increase of 4.3 percent over the past five years. In its quarterly guidance report, the company said it plans to open 10 more stores across the U.S., and the new stores should generate approximately 1.7 percent in comparable same-store sales. Michael’s also raised its EPS guidance to $0.42 per share for 2018, which is up from an EPS of $0.40 during the same time last year.