This Bank Stock Is Up Nearly 400% From Pandemic Lows and Still a Buy

Shares of Discover Financial Services (NYSE: DFS) sold off after the company's recent earnings report, but it's confusing as to why. The credit card company has always traded at a fairly cheap valuation, and does so today; the thinking goes, unsecured credit card balances are risky, so Discover's price-to-earnings multiple has traditionally been low.

The stock nose-dived during the onset of the COVID-19 pandemic, but has nearly quintupled off its pandemic lows, so perhaps those fortunate enough to buy near the bottom are cashing out profits.

However, given the strong household balance sheets from government stimulus and a lack of spending last year, credit card companies in general and Discover specifically look like a strong bet for 2022, as economic growth roars back.

Source Fool.com