NYSE:SCHW

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 4.7% below its fair value

Earnings are forecast to grow 4.39% per year

Earnings have grown 24.6% per year over the past 5 years

Pays a high and reliable dividend of 1.52%

Risk Analysis

No risks detected for SCHW from our risk checks.


Snowflake Analysis

Established dividend payer and good value.


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: SCHW has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.2%

SCHW

1.7%

US Capital Markets

1.5%

US Market


1 Year Return

1.9%

SCHW

19.0%

US Capital Markets

20.1%

US Market

Return vs Industry: SCHW underperformed the US Capital Markets industry which returned 19% over the past year.

Return vs Market: SCHW underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

SCHWIndustryMarket
7 Day-0.2%1.7%1.5%
30 Day-2.3%0.5%1.4%
90 Day6.9%8.6%8.7%
1 Year3.5%1.9%21.4%19.0%22.7%20.1%
3 Year17.6%13.7%40.0%32.1%50.1%40.5%
5 Year67.7%59.3%83.6%66.5%73.1%54.1%

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

Valuation

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

4.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SCHW ($47.23) is trading below our estimate of fair value ($49.58)

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


Price To Earnings Ratio

PE vs Industry: SCHW is good value based on its PE Ratio (17.6x) compared to the Capital Markets industry average (36x).

PE vs Market: SCHW is good value based on its PE Ratio (17.6x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: SCHW is poor value based on its PEG Ratio (4x)


Price to Book Ratio

PB vs Industry: SCHW is good value based on its PB Ratio (3.3x) compared to the US Capital Markets industry average (6.7x).


Next Steps

Future Growth

How is Charles Schwab forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

4.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SCHW's forecast earnings growth (4.4% per year) is above the savings rate (1.7%).

Earnings vs Market: SCHW's earnings (4.4% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: SCHW's revenue (3.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: SCHW's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SCHW's Return on Equity is forecast to be low in 3 years time (13.9%).


Next Steps

Past Performance

How has Charles Schwab performed over the past 5 years?

24.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SCHW has high quality earnings.

Growing Profit Margin: SCHW's current net profit margins (32.9%) are higher than last year (32.9%).


Past Earnings Growth Analysis

Earnings Trend: SCHW's earnings have grown significantly by 24.6% per year over the past 5 years.

Accelerating Growth: SCHW's earnings growth over the past year (5.9%) is below its 5-year average (24.6% per year).

Earnings vs Industry: SCHW earnings growth over the past year (5.9%) underperformed the Capital Markets industry 8.4%.


Return on Equity

High ROE: SCHW's Return on Equity (17.3%) 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: SCHW has a low level of unsold assets or inventory.

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


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

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

1.52%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years1.6%

Current dividend yield vs market & industry

Notable Dividend: SCHW's dividend (1.52%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: SCHW's dividend (1.52%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (25.3%), SCHW's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SCHW's dividends in 3 years are forecast to be well covered by earnings (27.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.0yrs

Average management tenure


CEO

Walt Bettinger (58yo)

11.3yrs

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 ($USD15.63M) is above average for companies of similar size in the US market ($USD10.81M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Walter Bettinger
President11.3yrsUS$15.63m0.036% $22.0m
Peter Crawford
Executive VP & CFO2.8yrsUS$2.27m0.0017% $1.0m
Joseph Martinetto
Senior EVP & COO2yrsUS$5.31m0.015% $9.1m
Tim Heier
Executive VP & CTO0yrsno datano data
Dennis Howard
Executive VP & Chief Information Officer0yrsno datano data
Richard Fowler
Senior Vice President of Investor Relations0yrsno datano data
Peter Morgan
Executive VP0.3yrsno data0.0011% $697.7k
Joe Carberry
Senior Vice President of Corporate Communications0yrsno datano data
Jonathan Craig
Senior Executive Vice President of Investor Services1.1yrsno datano data
Catherine Casey
Executive Vice President of Human Resources0yrsno datano data

2.0yrs

Average Tenure

53yo

Average Age

Experienced Management: SCHW's management team is considered experienced (2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Walter Bettinger
President11.3yrsUS$15.63m0.036% $22.0m
Charles Schwab
Chairman of the Board34.1yrsUS$6.05m10.32% $6.3b
Christopher Dodds
Independent Director5.3yrsUS$499.00k0.036% $21.8m
Arun Sarin
Independent Director10.3yrsUS$285.00k0.00099% $600.6k
Roger Walther
Independent Director31.1yrsUS$300.00k0.025% $15.3m
Paula Sneed
Independent Director18.1yrsUS$280.00k0.0078% $4.8m
Frank Herringer
Independent Director24.1yrsUS$295.00k0.014% $8.3m
Stephen McLin
Independent Director32.1yrsUS$438.00k0.013% $8.0m
Stephen Ellis
Independent Director7.3yrsUS$285.00k0.0027% $1.6m
Mark Goldfarb
Independent Director7.2yrsUS$310.00k0.0017% $1.0m

14.7yrs

Average Tenure

69yo

Average Age

Experienced Board: SCHW's board of directors are seasoned and experienced ( 14.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

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


Key Information

  • Name: The Charles Schwab Corporation
  • Ticker: SCHW
  • Exchange: NYSE
  • Founded: 1971
  • Industry: Investment Banking and Brokerage
  • Sector: Diversified Financials
  • Market Cap: US$60.671b
  • 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
SWGETLX (Eurotlx)YesCommon StockITEURSep 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)5%-FRN PERP USD1000 'F'DEUSDOct 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 two segments, Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services; equity compensation plan sponsors full-service recordkeeping for stock plans, stock options, restricted stock, performance shares, and stock appreciation rights; and retail investor, retirement plan, and mutual fund clearing services. The Advisor Services segment provides custodial, trading, and support services; and retirement business and corporate brokerage retirement services. This segment provides brokerage accounts with cash management capabilities; third-party mutual funds, as well as proprietary mutual funds, plus mutual fund trading, and clearing services to broker-dealers; and exchange-traded funds (ETFs), including proprietary and third-party ETFs. It also offers advice solutions, such as managed portfolios of proprietary and third-party mutual funds and ETFs, separately managed accounts, customized personal advice for tailored portfolios, and specialized planning and portfolio management. In addition, this segment provides banking products and services, including checking and savings accounts, certificates of deposit, first lien residential real estate mortgage loans, home equity loans and lines of credit, and pledged asset lines; and trust services comprising trust custody services, personal trust reporting services, and administrative trustee services. The company serves individuals and institutional clients in the United States, the Commonwealth of Puerto Rico, England, Hong Kong, Singapore, and Australia. The Charles Schwab Corporation was founded in 1971 and is headquartered in San Francisco, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:51
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.