Reviewing ZIP (OTCMKTS:ZIZTF) & Discover Financial Services (NYSE:DFS)

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

Institutional & Insider Ownership

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 hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for ZIP and Discover Financial Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ZIP	0	0	0	0	N/A
Discover Financial Services	0	12	8	0	2.40

Discover Financial Services has a consensus price target of $136.12, suggesting a potential downside of 6.23%. Given Discover Financial Services’ higher possible upside, analysts plainly believe Discover Financial Services is more favorable than ZIP.

Valuation and Earnings

This table compares ZIP and Discover Financial Services”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ZIP	N/A	N/A	N/A	N/A	N/A
Discover Financial Services	$17.40 billion	2.09	$2.94 billion	$8.77	16.55

Discover Financial Services has higher revenue and earnings than ZIP.

Profitability

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

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

Summary

Discover Financial Services beats ZIP on 8 of the 8 factors compared between the two stocks.

About ZIP

Zip Co Limited engages in the provision of digital retail finance and payments solutions to consumers, and small and medium sized merchants (SMEs) in Australia, New Zealand, Canada, and the United States. The company offers Buy Now Pay Later services, which offer line of credit and installment products to consumers through online and in-store. It also provides unsecured loans and lines of credit to SMEs. The company was formerly known as ZipMoney Limited and changed its name to Zip Co Limited in December 2017. Zip Co Limited was incorporated in 2009 and is headquartered in Sydney, Australia.

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.