DB:SWG

Stock Analysis Report

Executive Summary

The Charles Schwab Corporation, through its subsidiaries, provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.

Rewards

Trading at 17.8% below its fair value

Earnings are forecast to grow 2.87% per year

Earnings grew by 20.6% over the past year

Pays a high and reliable dividend of 1.39%

Risk Analysis

Highly volatile share price over past 3 months



Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Charles Schwab's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SWG's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.5%

SWG

-0.9%

DE Capital Markets

-0.3%

DE Market


1 Year Return

21.0%

SWG

6.1%

DE Capital Markets

14.9%

DE Market

Return vs Industry: SWG exceeded the German Capital Markets industry which returned 6.1% over the past year.

Return vs Market: SWG exceeded the German Market which returned 14.9% over the past year.


Shareholder returns

SWGIndustryMarket
7 Day-0.5%-0.9%-0.3%
30 Day14.8%-0.9%-0.1%
90 Day24.3%-3.4%7.1%
1 Year22.9%21.0%8.4%6.1%18.5%14.9%
3 Year25.6%21.6%-8.1%-19.1%20.0%9.5%
5 Year98.7%89.0%-22.5%-34.6%38.0%19.3%

Price Volatility Vs. Market

How volatile is Charles Schwab's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Charles Schwab undervalued compared to its fair value and its price relative to the market?

17.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SWG (€45) is trading below our estimate of fair value (€54.74)

Significantly Below Fair Value: SWG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: SWG is good value based on its PE Ratio (18x) compared to the Capital Markets industry average (23.1x).

PE vs Market: SWG is good value based on its PE Ratio (18x) compared to the German market (20.4x).


Price to Earnings Growth Ratio

PEG Ratio: SWG is poor value based on its PEG Ratio (6.3x)


Price to Book Ratio

PB vs Industry: SWG is overvalued based on its PB Ratio (3.4x) compared to the DE Capital Markets industry average (1.8x).


Next Steps

Future Growth

How is Charles Schwab forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

2.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SWG's forecast earnings growth (2.9% per year) is above the savings rate (-0.4%).

Earnings vs Market: SWG's earnings (2.9% per year) are forecast to grow slower than the German market (13% per year).

High Growth Earnings: SWG's earnings are forecast to grow, but not significantly.

Revenue vs Market: SWG's revenue (2.8% per year) is forecast to grow slower than the German market (4.9% per year).

High Growth Revenue: SWG's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SWG's Return on Equity is forecast to be low in 3 years time (16.2%).


Next Steps

Past Performance

How has Charles Schwab performed over the past 5 years?

24.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SWG has high quality earnings.

Growing Profit Margin: SWG's current net profit margins (33.5%) are higher than last year (30.9%).


Past Earnings Growth Analysis

Earnings Trend: SWG's earnings have grown significantly by 24.8% per year over the past 5 years.

Accelerating Growth: SWG's earnings growth over the past year (20.6%) is below its 5-year average (24.8% per year).

Earnings vs Industry: SWG earnings growth over the past year (20.6%) exceeded the Capital Markets industry -3.4%.


Return on Equity

High ROE: SWG's Return on Equity (17.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Charles Schwab's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: SWG has a low level of unsold assets or inventory.

Debt Coverage by Assets: SWG's debt is covered by short term assets (assets are 8.7x debt).


Financial Institutions Analysis

Asset Level: SWG's level of assets compared to its equity is moderate.

Allowance for Bad Loans: Insufficient data to determine if SWG has a sufficient allowance for bad loans.

Low Risk Liabilities: SWG reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if SWG has an acceptable proportion of non-loan assets held.

Low Risk Deposits: SWG has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if SWG has an appropriate level of bad loans.


Next Steps

Dividend

What is Charles Schwab's current dividend yield, its reliability and sustainability?

1.39%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%1.4%markettop25%3.6%industryaverage2.0%forecastin3Years1.5%

Current dividend yield vs market & industry

Notable Dividend: SWG's dividend (1.39%) is higher than the bottom 25% of dividend payers in the German market (1.37%).

High Dividend: SWG's dividend (1.39%) is low compared to the top 25% of dividend payers in the German market (3.57%).


Stability and Growth of Payments

Stable Dividend: SWG's dividends per share have been stable in the past 10 years.

Growing Dividend: SWG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.5%), SWG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SWG's dividends in 3 years are forecast to be well covered by earnings (28.1% payout ratio).


Next Steps

Management

What is the CEO of Charles Schwab's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Walt Bettinger (58yo)

11.2yrs

Tenure

US$15,627,607

Compensation

Mr. Walter William Bettinger, II, also known as Walt, has served as President and Chief Executive Officer of The Charles Schwab Corporation and a Member of the Board of Directors since 2008. He also serves ...


CEO Compensation Analysis

Compensation vs Market: Walt's total compensation ($USD15.63M) is above average for companies of similar size in the German market ($USD4.62M).

Compensation vs Earnings: Walt's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.8yrs

Average Tenure

53yo

Average Age

Experienced Management: SWG's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

14.5yrs

Average Tenure

69yo

Average Age

Experienced Board: SWG's board of directors are seasoned and experienced ( 14.5 years average tenure).


Insider Trading

Insider Buying: SWG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$28,14602 Dec 19
Peter Morgan
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares624
Max PriceUS$45.11
SellUS$668,67427 Nov 19
Arun Sarin
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares15,000
Max PriceUS$44.58
SellUS$111,24827 Nov 19
Peter Morgan
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares2,500
Max PriceUS$44.50
SellUS$26,950,81327 Nov 19
Charles Schwab
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares600,000
Max PriceUS$45.26
BuyUS$89,70805 Aug 19
Mark Goldfarb
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,595
Max PriceUS$34.57
BuyUS$102,96407 May 19
Charles Ruffel
EntityIndividual
Shares2,500
Max PriceUS$41.19
SellUS$2,326,65503 May 19
Charles Schwab
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares56,280
Max PriceUS$41.36
SellUS$10,290,02629 Apr 19
Charles Schwab
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares250,000
Max PriceUS$41.16
SellUS$20,453,32025 Apr 19
Charles Schwab
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares500,000
Max PriceUS$40.91
SellUS$10,055,80123 Apr 19
Charles Schwab
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares250,000
Max PriceUS$40.22
SellUS$938,26018 Apr 19
Nigel Murtagh
EntityIndividual
Shares23,200
Max PriceUS$40.44
SellUS$10,241,95801 Feb 19
Charles Schwab
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares250,000
Max PriceUS$40.97

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Walt Bettinger (58yo)

    President

    • Tenure: 11.2yrs
    • Compensation: US$15.63m
  • Joe Martinetto (56yo)

    Senior EVP & COO

    • Tenure: 1.8yrs
    • Compensation: US$5.31m
  • Joe Carberry

    Senior Vice President of Corporate Communications

    • Tenure: 0yrs
  • Peter Crawford (50yo)

    Executive VP & CFO

    • Tenure: 2.6yrs
    • Compensation: US$2.27m
  • Jonathan Craig (47yo)

    Senior Executive Vice President of Investor Services

    • Tenure: 0.9yrs
  • Dennis Howard

    Executive VP & Chief Information Officer

    • Tenure: 0yrs
  • Rich Fowler

    Senior Vice President of Investor Relations

    • Tenure: 0yrs
  • Catherine Casey

    Executive Vice President of Human Resources

    • Tenure: 0yrs
  • Tim Heier

    Executive VP & CTO

    • Tenure: 0yrs
  • Peter Morgan

    Executive VP

    • Tenure: 0.08yrs

Board Members

  • Chuck Schwab (82yo)

    Chairman of the Board

    • Tenure: 33.9yrs
    • Compensation: US$6.05m
  • Chris Dodds (59yo)

    Independent Director

    • Tenure: 5.2yrs
    • Compensation: US$499.00k
  • Arun Sarin (64yo)

    Independent Director

    • Tenure: 10.2yrs
    • Compensation: US$285.00k
  • Roger Walther (83yo)

    Independent Director

    • Tenure: 30.9yrs
    • Compensation: US$300.00k
  • Paula Sneed (71yo)

    Independent Director

    • Tenure: 17.9yrs
    • Compensation: US$280.00k
  • Frank Herringer (76yo)

    Independent Director

    • Tenure: 23.9yrs
    • Compensation: US$295.00k
  • Stephen McLin (72yo)

    Independent Director

    • Tenure: 31.9yrs
    • Compensation: US$438.00k
  • Stephen Ellis (57yo)

    Independent Director

    • Tenure: 7.2yrs
    • Compensation: US$285.00k
  • Walt Bettinger (58yo)

    President

    • Tenure: 11.2yrs
    • Compensation: US$15.63m
  • Mark Goldfarb (67yo)

    Independent Director

    • Tenure: 7yrs
    • Compensation: US$310.00k

Company Information

The Charles Schwab Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Charles Schwab Corporation
  • Ticker: SWG
  • Exchange: DB
  • Founded: 1971
  • Industry: Investment Banking and Brokerage
  • Sector: Diversified Financials
  • Market Cap: US$62.508b
  • Listing Market Cap: US$56.369b
  • Shares outstanding: 1.28b
  • Website: https://www.schwab.com

Number of Employees


Location

  • The Charles Schwab Corporation
  • 211 Main Street
  • San Francisco
  • California
  • 94105
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SCHWNYSE (New York Stock Exchange)YesCommon StockUSUSDSep 1987
SWGDB (Deutsche Boerse AG)YesCommon StockDEEURSep 1987
SCHW *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNSep 1987
0L3ILSE (London Stock Exchange)YesCommon StockGBUSDSep 1987
SCHWWBAG (Wiener Boerse AG)YesCommon StockATEURSep 1987
SCHW.PRCNYSE (New York Stock Exchange)DEP SHS PFD CUSUSDJul 2015
SCHW.PRDNYSE (New York Stock Exchange)DEP SHS 1/40 PFDUSUSDMar 2016
SCHW34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM USD0.01BRBRLApr 2016
A188UEDB (Deutsche Boerse AG)-E 4.625%DEUSDOct 2016
A19RL4DB (Deutsche Boerse AG)ALT TIER I PERPDEUSDOct 2017

Biography

The Charles Schwab Corporation, through its subsidiaries, provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company operates through ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 20:59
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.