Vanquis Banking Group (OTCMKTS:FPLPF) vs. Discover Financial Services (NYSE:DFS) Head to Head Review

Vanquis Banking Group (OTCMKTS:FPLPF) and Discover Financial Services (NYSE:DFS) are both financial services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Profitability

This table compares Vanquis Banking Group and Discover Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vanquis Banking Group	N/A	N/A	N/A
Discover Financial Services	12.88%	20.92%	1.94%

Insider & Institutional Ownership

58.3% of Vanquis Banking Group shares are held by institutional investors. Comparatively, 86.9% of Discover Financial Services shares are held by institutional investors. 0.7% of Discover Financial Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Vanquis Banking Group and Discover Financial Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Vanquis Banking Group	N/A	N/A	N/A	$1.12	0.61
Discover Financial Services	$17.40 billion	2.14	$2.94 billion	$12.39	11.98

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

Dividends

Vanquis Banking Group pays an annual dividend of $0.85 per share and has a dividend yield of 124.0%. Discover Financial Services pays an annual dividend of $2.80 per share and has a dividend yield of 1.9%. Vanquis Banking Group pays out 76.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Discover Financial Services pays out 22.6% of its earnings in the form of a dividend. Discover Financial Services has increased its dividend for 13 consecutive years.

Analyst Ratings

This is a summary of recent ratings for Vanquis Banking Group and Discover Financial Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vanquis Banking Group	0	0	0	0	N/A
Discover Financial Services	0	12	7	0	2.37

Discover Financial Services has a consensus price target of $138.81, suggesting a potential downside of 6.48%. Given Discover Financial Services’ higher probable upside, analysts clearly believe Discover Financial Services is more favorable than Vanquis Banking Group.

Summary

Discover Financial Services beats Vanquis Banking Group on 12 of the 13 factors compared between the two stocks.

About Vanquis Banking Group

Vanquis Banking Group plc engages in the provision of personal credit products to the non-standard lending market in the United Kingdom and the Republic of Ireland. The company offers credit cards products, and unsecured personal loans products, as well as provides vehicle finance for cars, motorbikes, van, and light commercial vehicles. It also operates Snoop, a fintech app, that uses open banking to help users save money and manage their finances. The company was formerly known as Provident Financial plc and changed its name to Vanquis Banking Group plc in March 2023. Vanquis Banking Group plc was founded in 1880 and is headquartered in Bradford, the United Kingdom.

About Discover Financial Services

Discover Financial Services, through its subsidiaries, provides digital banking products and services, and payment services in the United States. It operates in two segments, Digital Banking and Payment Services. The Digital Banking segment offers Discover-branded credit cards to individuals; personal loans, home loans, and other consumer lending; and direct-to-consumer deposit products comprising savings accounts, certificates of deposit, money market accounts, IRA certificates of deposit, IRA savings accounts and checking accounts, and sweep accounts. The Payment Services segment operates the PULSE to access automated teller machines, debit, and electronic funds transfer network; and Diners Club International, a payments network that issues Diners Club branded charge cards and/or provides card acceptance services, as well as offers payment transaction processing and settlement services. The company was incorporated in 1960 and is based in Riverwoods, Illinois.