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Also traded in: Brazil, Germany, Mexico

GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 7/10

vs
industry
vs
history
Cash-to-Debt N/A
NYSE:SCHW's Cash-to-Debt is ranked higher than
74% of the 695 Companies
in the Global Capital Markets industry.

( Industry Median: 55.65 vs. NYSE:SCHW: N/A )
Ranked among companies with meaningful Cash-to-Debt only.
NYSE:SCHW' s Cash-to-Debt Range Over the Past 10 Years
Min: 1.6  Med: 4.13 Max: N/A
Current: N/A
Equity-to-Asset 0.07
NYSE:SCHW's Equity-to-Asset is ranked lower than
95% of the 650 Companies
in the Global Capital Markets industry.

( Industry Median: 0.55 vs. NYSE:SCHW: 0.07 )
Ranked among companies with meaningful Equity-to-Asset only.
NYSE:SCHW' s Equity-to-Asset Range Over the Past 10 Years
Min: 0.06  Med: 0.08 Max: 0.11
Current: 0.07
0.06
0.11
Interest Coverage 17.50
NYSE:SCHW's Interest Coverage is ranked lower than
61% of the 591 Companies
in the Global Capital Markets industry.

( Industry Median: 117.55 vs. NYSE:SCHW: 17.50 )
Ranked among companies with meaningful Interest Coverage only.
NYSE:SCHW' s Interest Coverage Range Over the Past 10 Years
Min: 2.97  Med: 9.32 Max: 20.74
Current: 17.5
2.97
20.74
WACC vs ROIC
16.10%
24.48%
WACC
ROIC
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 6/10

vs
industry
vs
history
Operating Margin % 40.05
NYSE:SCHW's Operating Margin % is ranked higher than
75% of the 680 Companies
in the Global Capital Markets industry.

( Industry Median: 13.71 vs. NYSE:SCHW: 40.05 )
Ranked among companies with meaningful Operating Margin % only.
NYSE:SCHW' s Operating Margin % Range Over the Past 10 Years
Min: 18.22  Med: 33.16 Max: 40.05
Current: 40.05
18.22
40.05
Net Margin % 25.28
NYSE:SCHW's Net Margin % is ranked higher than
69% of the 681 Companies
in the Global Capital Markets industry.

( Industry Median: 10.10 vs. NYSE:SCHW: 25.28 )
Ranked among companies with meaningful Net Margin % only.
NYSE:SCHW' s Net Margin % Range Over the Past 10 Years
Min: 10.62  Med: 20.77 Max: 48.2
Current: 25.28
10.62
48.2
ROE % 12.20
NYSE:SCHW's ROE % is ranked higher than
77% of the 687 Companies
in the Global Capital Markets industry.

( Industry Median: 3.88 vs. NYSE:SCHW: 12.20 )
Ranked among companies with meaningful ROE % only.
NYSE:SCHW' s ROE % Range Over the Past 10 Years
Min: 8.04  Med: 11.89 Max: 55.08
Current: 12.2
8.04
55.08
ROA % 0.99
NYSE:SCHW's ROA % is ranked lower than
55% of the 701 Companies
in the Global Capital Markets industry.

( Industry Median: 1.41 vs. NYSE:SCHW: 0.99 )
Ranked among companies with meaningful ROA % only.
NYSE:SCHW' s ROA % Range Over the Past 10 Years
Min: 0.54  Med: 0.88 Max: 5.27
Current: 0.99
0.54
5.27
3-Year Revenue Growth Rate 10.10
NYSE:SCHW's 3-Year Revenue Growth Rate is ranked higher than
62% of the 535 Companies
in the Global Capital Markets industry.

( Industry Median: 4.40 vs. NYSE:SCHW: 10.10 )
Ranked among companies with meaningful 3-Year Revenue Growth Rate only.
NYSE:SCHW' s 3-Year Revenue Growth Rate Range Over the Past 10 Years
Min: -10  Med: 3.8 Max: 29.9
Current: 10.1
-10
29.9
3-Year EBITDA Growth Rate 17.90
NYSE:SCHW's 3-Year EBITDA Growth Rate is ranked higher than
61% of the 410 Companies
in the Global Capital Markets industry.

( Industry Median: 9.30 vs. NYSE:SCHW: 17.90 )
Ranked among companies with meaningful 3-Year EBITDA Growth Rate only.
NYSE:SCHW' s 3-Year EBITDA Growth Rate Range Over the Past 10 Years
Min: -24.6  Med: 13.5 Max: 37
Current: 17.9
-24.6
37
3-Year EPS without NRI Growth Rate 18.90
NYSE:SCHW's 3-Year EPS without NRI Growth Rate is ranked higher than
61% of the 403 Companies
in the Global Capital Markets industry.

( Industry Median: 7.70 vs. NYSE:SCHW: 18.90 )
Ranked among companies with meaningful 3-Year EPS without NRI Growth Rate only.
NYSE:SCHW' s 3-Year EPS without NRI Growth Rate Range Over the Past 10 Years
Min: -43.7  Med: 14.3 Max: 73.2
Current: 18.9
-43.7
73.2
GuruFocus has detected 3 Warning Signs with Charles Schwab Corp $NYSE:SCHW.
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» NYSE:SCHW's 10-Y Financials

Financials


Revenue & Net Income
Equity & Asset
Operating Cash Flow & Free Cash Flow
Operating Cash Flow & Net Income

» Details

Guru Trades

Q1 2016

SCHW Guru Trades in Q1 2016

Caxton Associates 350,000 sh (New)
Jim Simons 17,500 sh (New)
David Rolfe 5,745,873 sh (New)
Mairs and Power 218,810 sh (+124.94%)
Jeremy Grantham 22,245,210 sh (+114.68%)
Jerome Dodson 1,000,000 sh (+47.06%)
Murray Stahl 18,799 sh (+2.76%)
Dodge & Cox 103,001,887 sh (+0.37%)
PRIMECAP Management 55,743,131 sh (+0.10%)
First Eagle Investment 900 sh (unchged)
Tom Gayner 1,057,000 sh (unchged)
Chuck Royce 29,400 sh (unchged)
Paul Tudor Jones 16,200 sh (unchged)
Steven Cohen 100,000 sh (unchged)
David Carlson 1,880,000 sh (unchged)
Pioneer Investments Sold Out
Ken Heebner Sold Out
Louis Moore Bacon Sold Out
Mario Gabelli 186,195 sh (-0.03%)
Glenn Greenberg 9,554,406 sh (-0.50%)
Lou Simpson 12,279,954 sh (-2.18%)
Frank Sands 36,742,105 sh (-6.19%)
Chris Davis 13,715,337 sh (-7.37%)
Ron Baron 6,993,446 sh (-22.14%)
RS Investment Management 148,840 sh (-22.20%)
» More
Q2 2016

SCHW Guru Trades in Q2 2016

Ruane Cunniff 9,155,367 sh (New)
Paul Tudor Jones 42,191 sh (New)
David Carlson 2,300,000 sh (+22.34%)
Mairs and Power 259,448 sh (+18.57%)
Chris Davis 15,544,811 sh (+13.34%)
Chuck Royce 29,400 sh (unchged)
First Eagle Investment 900 sh (unchged)
Tom Gayner 1,057,000 sh (unchged)
Paul Tudor Jones 26,800 sh (unchged)
Paul Tudor Jones 11,200 sh (unchged)
Jim Simons Sold Out
RS Investment Management Sold Out
Caxton Associates Sold Out
Dodge & Cox 102,931,469 sh (-0.07%)
PRIMECAP Management 54,757,503 sh (-1.77%)
Glenn Greenberg 9,299,975 sh (-2.66%)
Ron Baron 6,741,610 sh (-3.60%)
David Rolfe 5,528,510 sh (-3.78%)
Frank Sands 34,774,985 sh (-5.35%)
Lou Simpson 11,560,900 sh (-5.86%)
Jerome Dodson 900,000 sh (-10.00%)
Mario Gabelli 165,116 sh (-11.32%)
Murray Stahl 16,016 sh (-14.80%)
Jeremy Grantham 67,447 sh (-99.70%)
» More
Q3 2016

SCHW Guru Trades in Q3 2016

Manning & Napier Advisors, Inc 164,630 sh (New)
Ray Dalio 67,200 sh (New)
Ken Heebner 130,000 sh (New)
George Soros 7,294 sh (New)
Joel Greenblatt 22,822 sh (New)
Pioneer Investments 1,952,986 sh (New)
Mairs and Power 297,598 sh (+14.70%)
Chris Davis 16,147,073 sh (+3.87%)
Jerome Dodson 900,000 sh (unchged)
David Carlson 2,300,000 sh (unchged)
Tom Gayner 1,057,000 sh (unchged)
First Eagle Investment 900 sh (unchged)
Jeremy Grantham Sold Out
Dodge & Cox 101,788,384 sh (-1.11%)
Ron Baron 6,664,784 sh (-1.14%)
Glenn Greenberg 9,166,877 sh (-1.43%)
Ruane Cunniff 8,838,730 sh (-3.46%)
PRIMECAP Management 52,657,350 sh (-3.84%)
Lou Simpson 11,038,493 sh (-4.52%)
David Rolfe 5,250,094 sh (-5.04%)
Frank Sands 32,696,635 sh (-5.98%)
Murray Stahl 13,972 sh (-12.76%)
Chuck Royce 22,000 sh (-25.17%)
Mario Gabelli 107,641 sh (-34.81%)
Paul Tudor Jones 8,164 sh (-80.65%)
» More
Q4 2016

SCHW Guru Trades in Q4 2016

Andreas Halvorsen 8,057,576 sh (New)
Ray Dalio 145,900 sh (+117.11%)
Pioneer Investments 2,707,070 sh (+38.61%)
Joel Greenblatt 30,168 sh (+32.19%)
Mairs and Power 299,123 sh (+0.51%)
Jerome Dodson 900,000 sh (unchged)
David Carlson 2,300,000 sh (unchged)
First Eagle Investment 900 sh (unchged)
Chuck Royce 22,000 sh (unchged)
Tom Gayner 1,057,000 sh (unchged)
Ken Heebner Sold Out
George Soros Sold Out
Paul Tudor Jones Sold Out
Mario Gabelli 107,246 sh (-0.37%)
Ron Baron 6,616,406 sh (-0.73%)
Ruane Cunniff 8,427,500 sh (-4.65%)
Dodge & Cox 96,675,174 sh (-5.02%)
Frank Sands 30,272,825 sh (-7.41%)
Glenn Greenberg 8,204,928 sh (-10.49%)
David Rolfe 4,534,145 sh (-13.64%)
PRIMECAP Management 45,240,000 sh (-14.09%)
Murray Stahl 11,368 sh (-18.64%)
Manning & Napier Advisors, Inc 131,690 sh (-20.01%)
Lou Simpson 6,821,241 sh (-38.20%)
Chris Davis 808,108 sh (-95.00%)
» More
» Details

Insider Trades

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Preferred stocks of Charles Schwab Corp

SymbolPriceYieldDescription
SCHWPRD25.995.65Deposit Shs Repr 1/40th % Non-Cum Pfd Shs Series -D-
SCHWPRB25.605.90Deposit Shs Repr 6% Non-Cum Perp Pfd Shs Series -B-
SCHWPRC26.645.686 % Non-Cum Pfd Shs Series -C-

Business Description

Industry: Brokers & Exchanges » Capital Markets    NAICS: 523120    SIC: 6211
Compare:NYSE:SPGI, NYSE:MS, NYSE:NMR, OTCPK:MQBKY, NAS:AMTD, OTCPK:HAITY, NYSE:MCO, NAS:IBKR, NYSE:RJF, NYSE:GS, OTCPK:DSEEY, NAS:ETFC, NYSE:MSCI, NAS:MKTX, NYSE:FDS, NYSE:LAZ, NYSE:SF, NAS:LPLA, BATS:BATS, OTCPK:TULLF » details
Traded in other countries:SCHW34.Brazil, SWG.Germany, SCHW.Mexico,
Charles Schwab Corp is a savings and loan holding company, which through its subsidiaries is engaged in securities brokerage, banking and related financial services. It operates in two segments namely Investor Services and Advisor Services.

Charles Schwab Corp was incorporated in Delaware in 1986. The Company, through its subsidiaries, is engaged in securities brokerage, banking and related financial services. It provides financial services to individuals and institutional clients through two segments namely Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services to individual investors, retirement plan services and corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services to independent investment advisors (IAs) and retirement business services to independent retirement plan advisors and recordkeepers whose plan assets are held at Schwab Bank. The Investor Services segment provides retail brokerage and banking services to individual investors. Through the Advisor Services segment, it provides custodial, trading, and support services to IAs. To attract and serve IAs, it has a dedicated sales force and service teams assigned to meet their needs. IAs who custody client accounts at Schwab may use proprietary software that provides them with up-to-date client account information, as well as trading capabilities. The Advisor Services website is the core platform for IAs to conduct daily business activities online with Schwab, including submitting and retrieving client account information and viewing news and market information. This platform provides IAs with a comprehensive suite of electronic and paper-based reporting capabilities. It offers online cashiering services, as well as internet-based eDocuments sites for both IAs and their clients that provide multi-year archiving of online statements, trade confirms and tax reports, along with document search capabilities. On 1 September 2011, it completed its acquisition of all of the outstanding common shares of optionsXpress Holdings, Inc., an online brokerage firm focused on equity option securities and futures. The optionsXpress brokerage platform provides active investors and traders trading tools, analytics and education to execute a variety of investment strategies.

Guru Investment Theses on Charles Schwab Corp

Baron Opportunity Fund Comments on The Charles Schwab Corp - Feb 21, 2017

Shares of brokerage business The Charles Schwab Corp. (NYSE:SCHW) increased during the fourth quarter on the potential of multiple interest rate increases into 2017, which should materially improve the company’s earnings. Charles Schwab also reported solid asset growth reaching over $2.7 trillion. The business continued to shift to fee-based advice from trading activity, a move that we believe creates more stability and the potential for increased profitability. (Michael Baron)





From Baron Funds' Baron Opportunity Fund fourth quarter 2016 commentary.



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Baron Funds' Baron Fifth Avenue Growth Fund Comments on The Charles Schwab Corp - Feb 13, 2017

Shares of brokerage business The Charles Schwab Corp. (NYSE:SCHW) rose over 25% in the fourth quarter on the expectation of multiple interest rate increases in 2017, which should bode well for the company’s earnings. Charles Schwab also reported solid asset growth reaching over $2.7 trillion. The business continued to shift to fee-based advice from trading activity, a move that we believe creates more stability and the potential for increased profitability.



From Baron Funds' Fifth Avenue Growth Fund fourth quarter 2016 commentary.



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Baron Asset Fund Comments on The Charles Schwab Corp - Jan 30, 2017

Shares of The Charles Schwab Corp. (NYSE:SCHW), the well-known brokerage firm, increased sharply in the aftermath of the presidential election. Interest rates and equity markets both spiked in anticipation of the likely impact of the Trump presidency on financial markets. Both these factors should be positive for Schwab’s earnings over the near term. In addition, the company continued to grow the assets it oversees at a healthy pace.



From Barron Asset Fund fourth quarter 2016 commentary.



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Jerome Dodson Comments on Charles Schwab - Jan 25, 2017

Charles Schwab (NYSE:SCHW), the San Francisco–based bank and brokerage firm, rose 19.9%, from $32.93 to $39.47, contributing 101 basis points to the Fund’s return. Schwab’s earnings on its bank assets and money market funds move up and down with interest rates. The stock spent most of the year underwater, as interest rates fell and central bankers in Japan and Europe pushed their rates into negative territory. The tide started to turn in July, however, as the U.S. economy improved and interest rates rose. Schwab’s stock jumped as rates surged even market is fully valued, it won’t necessarily go down. It can stay fully valued for a long time without dropping significantly lower. The robust economy, combined with Mr. Trump’s proposed policies, could cause an acceleration in corporate earnings, which could push the market even higher.



From the Parnassus Fund fourth quarter 2016 commentary.



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David Rolfe Comments on Charles Schwab - Jan 16, 2017

Charles Schwab (NYSE:SCHW) was a top performer in the quarter as the company stands to benefit from the continued normalization of U.S. monetary policy. Despite a single federal funds rate hike during calendar year 2016, market expectations for further rate hikes have dramatically risen in the face of potential fiscal stimulus and higher inflation expectations.

While we understand the market’s desire to discount the near-term “embedded option” of money market fee waiver relief at Schwab, we continue to invest in the Company for its industry-leading pretax profit margins and asset gathering capabilities, which we think are a byproduct of their consistent productivity investments made over the past few decades. We think this positions Schwab well in the increasingly commodified financial services industry, as the Company’s low-cost model and scale allows them to pass savings on to advisors and clients in the form of competitively lower fees, in exchange for mid-single digit platform asset growth. Combined with modest rate relief and continued productivity gains, we expect Schwab to continue posting earnings per share growth in the mid-teens.

From David Rolfe (Trades, Portfolio)'s fourth quarter 2016 Wedgewood Partners investor letter.



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Baron Funds Comments on The Charles Schwab Corp. - Nov 14, 2016

Shares of brokerage business The Charles Schwab Corp. (NYSE:SCHW) appreciated in the third quarter on continued strong asset growth. The business continued to shift to fee-based advice from trading activity, a move that we believe creates more stability and the potential for increased profitability. Speculation of an interest rate hike by the U.S. Federal Reserve also helped boost the stock price as a rate increase would likely improve earnings for the company. (Michael Baron)



From Ron Baron (Trades, Portfolio)'s Barons Partners Fund third-quarter 2016 commentary.



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Jerome Dodson Comments on Charles Schwab - Nov 01, 2016

Charles Schwab (NYSE:SCHW), the San Francisco–based bank and brokerage firm, jumped 24.7% from $25.31 to $31.57, adding 78 basis points to the Fund’s return. During the quarter, investors started anticipating an increase in interest rates. This matters for Schwab, because higher rates improve the company’s ability to profit from its bank assets and money market funds.



From Jerome Dodson (Trades, Portfolio)'s Parnassus Fund third-quarter 2016 commentary.

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Baron Funds Comments on The Charles Schwab Corp - Oct 21, 2016

Shares of brokerage firm The Charles Schwab Corp. (NYSE:SCHW) appreciated as rising equity markets led to growth in its client assets and the revenue streams stemming from those assets. The firm also continued to grow its percentage of assets that charge for fee-based advice, a move that we believe creates greater revenue visibility and the potential for increased profitability. In addition, ongoing speculation of an interest rate hike by the U.S. Federal Reserve was a positive for Schwab, which we believe would experience significant, rapid profit growth should interest rates increase to higher historical levels.



From Baron Funds' Barron Asset Fund third-quarter 2016 commentary.



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Jerome Dodson Comments on Charles Schwab - Jul 26, 2016

Charles Schwab (NYSE:SCHW), the San Francisco–based bank and brokerage firm, saw its stock drop 9.7% from $28.02 to $25.31, for a loss of 30 basis points. The stock slid because investors pushed back their expectations for a rise in interest rates. At the beginning of the quarter, the market assigned a less than 50% probability that the Fed Funds rate would remain unchanged in the 0.25%-0.50% range by the end of 2016. In late June (on the heels of the Brexit news), this probability shot up to almost 90%. This matters for Schwab, because low rates crimp the company’s ability to profit from its bank assets and money market funds. We’re holding our Schwab position, despite this expected delay in an interest rate hike, because we think the company’s long-term prospects are terrific.


From Jerome Dodson (Trades, Portfolio)'s Parnassus Fund second quarter 2016 commentary.

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Ruane Cunniff Comments on Charles Schwab - Jul 13, 2016

Charles Schwab (NYSE:SCHW) pioneered the discount brokerage business in the mid-1970s and has remained an innovator in the investment services industry ever since. It built the well-known OneSource marketplace to provide individual investors access to thousands of no-load mutual funds and was among the first to provide individual investors with an online interface. The success of its investor-friendly strategy is evidenced by a tripling of the company’s client assets from $870 billion in 2000 to more than $2.5 trillion at year-end 2015. This makes Schwab the largest publicly-traded investment services firm in the U.S., ahead of all other discount brokers as well as all the wirehouses. We believe Schwab will continue to attract new brokerage accounts and client assets.

Specifically, we believe that the trend towards passive investment products and toward automated investment advice represents more opportunity than risk for the company. Traditional wirehouses still hold more than $10 trillion in client assets and likely will be market share donors for years to come. Schwab also holds many billions of dollars in client cash deposits, on which it earns a spread that tends to rise when interest rates rise. Any increase in short-term interest rates would provide significant earnings to Schwab, and thus upside to our investment, though we are not counting on it.

From Ruane Cunniff (Trades, Portfolio)'s Sequoia Fund second quarter 2016 shareholder letter.

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Baron Funds Comments on Charles Schwab Corp - Jun 01, 2016

We are also investors in The Charles Schwab Corp. (NYSE:SCHW), a premier discount brokerage firm offering securities brokerage and other financial services to individual investors and independent financial advisors. We have owned this company since 1992, when the stock was trading at a split adjusted price of around $1 per share. Today, it trades at more than 30 times that amount. Despite this impressive growth, we feel the company still has many opportunities ahead. Management’s emphasis on earning customer trust has made it, in our view, a sterling brand. We believe its premium brand and superior services will allow Schwab to continue winning share in its core business. Additionally, the Investor Services division has broadened its offerings to include investment management and advice. Its recently released product, Schwab Intelligent Portfolio, manages a client’s assets for no additional cost by utilizing proprietary product and the Schwab bank. We believe this complimentary service will be difficult for rivals to match and will create sticky and valuable customer relationships.



From Baron Funds' May 2016 Baron Insight: Investing in Financials.



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Baron Partners Fund Commentary on The Charles Schwab Corp - May 09, 2016

Shares of The Charles Schwab Corp., (NYSE:SCHW) an investment brokerage firm, declined in the first quarter due to the extreme downward pressure on the equity markets to start the year as a result of signs of a slowing Chinese economy and falling energy prices. Higher market volatility led to a decline in trading activity. Finally, shares were pressured by investor concerns that interest rate hikes will be paused (or reversed), causing net interest margins to remain low and money market fee waivers to persist. We believe Schwab will continue to experience growth in accounts as brokers leave traditional wirehouses. (Michael Baron)



From Baron Partners Fund first quarter 2016 commentary.



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Baron Funds Comments on The Charles Schwab Corp - Apr 26, 2016

Shares of brokerage firm The Charles Schwab Corp. (NYSE:SCHW) declined as a result of the cyclical challenges to its earnings caused by lower equity market indexes and lower long-term interest rates. Lower equity markets result in lower asset-based fees to Schwab, and lower interest rates result in a lower net interest margin and the prospect of its money market fee waivers persisting for a longer period. Higher equity market volatility also resulted in a decline in trading activity by its clients.



From Baron Asset Funds' first quarter 2016 commentary.



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David Rolfe Comments on Charles Schwab - Apr 15, 2016

Charles Schwab (NYSE:SCHW)



As our conviction in M&T Bank waned, conviction built in another previously held financial, Charles Schwab. We previously held Schwab, ultimately selling the stock for valuation reasons in late 2013, after the stock got well ahead of what we thought were solid fundamentals. Valuation was the driving factor for the sell approximately two years ago, and valuation was the driving factor for this most recent purchase. In other words, little has changed from a fundamental point of view. Schwab has maintained their low-cost leadership (per dollar of platform assets) by leveraging their independent open-architecture asset gathering platform, and scaling over $2.3 trillion in client assets across decades of technology investments. Schwab’s low- cost of servicing allows them to pass on lower fees to advisors and clients, which is a key advantage, particularly in the highly commoditized financial services industry. While Charles Schwab’s capital intensity has increased over the past several years, they continue to maintain industry-leading pretax profit margins. We expect Schwab to continue gathering assets at a mid-single digit organic growth rate, combined with continued expense leverage, and only modest help from the interest rate environment.



From David Rolfe's Wedgewood Partners 1st Quarter 2016 Client Letter.



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Baron Funds Comments on The Charles Schwab Corp - Jan 26, 2016

Shares of The Charles Schwab Corp. (NYSE:SCHW), the discount brokerage firm, benefited from the dual tailwinds of rising interest rates and rising equity markets. Higher interest rates benefit Schwab both by driving up its net interest revenue and also by leading to reductions in waivers on its money market products. Higher equity markets result in higher revenues from its products, such as mutual funds, that charge fees based on underlying asset levels. Trading volume and the associated trading fees also generally increase in rising equity markets. Schwab also continues to benefit from the ongoing trend of investment advisors leaving large wirehouses to become independent advisors, many of whom conduct their business through Schwab.



From Baron Funds' Baron Asset Fund commentary for fourth quarter 2015.



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Baron Funds Comments on Charles Schwab Corp. - Nov 13, 2015

We have purchased an initial position in the shares of The Charles Schwab Corp. (NYSE:SCHW) In business for over 40 years, Schwab has become a trusted platform to independent registered investment advisors (RIAs) and individual investors alike. We believe Schwab is a structural share gainer in assets under management as advisors continue to migrate away from bulge bracket brokerage firms and wirehouses and find Schwab’s integrated custody, trading, portfolio management, and other investment advisory services uniquely suitable. We think profit margins have further room to improve as the company has been investing aggressively for growth and should start to realize the benefits of leverage and scale over the next few years.



From Baron Funds' Fifth Avenue Growth Fund 3rd quarter 2015 commentary.



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Top Ranked Articles about Charles Schwab Corp

Baron Opportunity Fund Comments on The Charles Schwab Corp Guru stock highlight
Shares of brokerage business The Charles Schwab Corp. (NYSE:SCHW) increased during the fourth quarter on the potential of multiple interest rate increases into 2017, which should materially improve the company’s earnings. Charles Schwab also reported solid asset growth reaching over $2.7 trillion. The business continued to shift to fee-based advice from trading activity, a move that we believe creates more stability and the potential for increased profitability. (Michael Baron) Read more...
Baron Funds' Baron Fifth Avenue Growth Fund Comments on The Charles Schwab Corp Guru stock highlight
Shares of brokerage business The Charles Schwab Corp. (NYSE:SCHW) rose over 25% in the fourth quarter on the expectation of multiple interest rate increases in 2017, which should bode well for the company’s earnings. Charles Schwab also reported solid asset growth reaching over $2.7 trillion. The business continued to shift to fee-based advice from trading activity, a move that we believe creates more stability and the potential for increased profitability. Read more...
Baron Asset Fund Comments on The Charles Schwab Corp Guru stock highlight
Shares of The Charles Schwab Corp. (NYSE:SCHW), the well-known brokerage firm, increased sharply in the aftermath of the presidential election. Interest rates and equity markets both spiked in anticipation of the likely impact of the Trump presidency on financial markets. Both these factors should be positive for Schwab’s earnings over the near term. In addition, the company continued to grow the assets it oversees at a healthy pace. Read more...
Jerome Dodson Comments on Charles Schwab Guru stock highlight
Charles Schwab (NYSE:SCHW), the San Francisco–based bank and brokerage firm, rose 19.9%, from $32.93 to $39.47, contributing 101 basis points to the Fund’s return. Schwab’s earnings on its bank assets and money market funds move up and down with interest rates. The stock spent most of the year underwater, as interest rates fell and central bankers in Japan and Europe pushed their rates into negative territory. The tide started to turn in July, however, as the U.S. economy improved and interest rates rose. Schwab’s stock jumped as rates surged even market is fully valued, it won’t necessarily go down. It can stay fully valued for a long time without dropping significantly lower. The robust economy, combined with Mr. Trump’s proposed policies, could cause an acceleration in corporate earnings, which could push the market even higher. Read more...
David Rolfe Comments on Charles Schwab Guru stock highlight
Charles Schwab (NYSE:SCHW) was a top performer in the quarter as the company stands to benefit from the continued normalization of U.S. monetary policy. Despite a single federal funds rate hike during calendar year 2016, market expectations for further rate hikes have dramatically risen in the face of potential fiscal stimulus and higher inflation expectations. Read more...
Baron Funds Comments on The Charles Schwab Corp. Guru stock highlight
Shares of brokerage business The Charles Schwab Corp. (NYSE:SCHW) appreciated in the third quarter on continued strong asset growth. The business continued to shift to fee-based advice from trading activity, a move that we believe creates more stability and the potential for increased profitability. Speculation of an interest rate hike by the U.S. Federal Reserve also helped boost the stock price as a rate increase would likely improve earnings for the company. (Michael Baron) Read more...
Jerome Dodson Comments on Charles Schwab Guru stock highlight
Charles Schwab (NYSE:SCHW), the San Francisco–based bank and brokerage firm, jumped 24.7% from $25.31 to $31.57, adding 78 basis points to the Fund’s return. During the quarter, investors started anticipating an increase in interest rates. This matters for Schwab, because higher rates improve the company’s ability to profit from its bank assets and money market funds. Read more...
Baron Funds Comments on The Charles Schwab Corp Guru stock highlight
Shares of brokerage firm The Charles Schwab Corp. (NYSE:SCHW) appreciated as rising equity markets led to growth in its client assets and the revenue streams stemming from those assets. The firm also continued to grow its percentage of assets that charge for fee-based advice, a move that we believe creates greater revenue visibility and the potential for increased profitability. In addition, ongoing speculation of an interest rate hike by the U.S. Federal Reserve was a positive for Schwab, which we believe would experience significant, rapid profit growth should interest rates increase to higher historical levels. Read more...
Jerome Dodson Comments on Charles Schwab Guru stock highlight
Charles Schwab (NYSE:SCHW), the San Francisco–based bank and brokerage firm, saw its stock drop 9.7% from $28.02 to $25.31, for a loss of 30 basis points. The stock slid because investors pushed back their expectations for a rise in interest rates. At the beginning of the quarter, the market assigned a less than 50% probability that the Fed Funds rate would remain unchanged in the 0.25%-0.50% range by the end of 2016. In late June (on the heels of the Brexit news), this probability shot up to almost 90%. This matters for Schwab, because low rates crimp the company’s ability to profit from its bank assets and money market funds. We’re holding our Schwab position, despite this expected delay in an interest rate hike, because we think the company’s long-term prospects are terrific.
Read more...
Ruane Cunniff Comments on Charles Schwab Guru stock highlight
Charles Schwab (NYSE:SCHW) pioneered the discount brokerage business in the mid-1970s and has remained an innovator in the investment services industry ever since. It built the well-known OneSource marketplace to provide individual investors access to thousands of no-load mutual funds and was among the first to provide individual investors with an online interface. The success of its investor-friendly strategy is evidenced by a tripling of the company’s client assets from $870 billion in 2000 to more than $2.5 trillion at year-end 2015. This makes Schwab the largest publicly-traded investment services firm in the U.S., ahead of all other discount brokers as well as all the wirehouses. We believe Schwab will continue to attract new brokerage accounts and client assets. Read more...

Ratios

vs
industry
vs
history
PE Ratio 31.78
SCHW's PE Ratio is ranked lower than
70% of the 500 Companies
in the Global Capital Markets industry.

( Industry Median: 20.00 vs. SCHW: 31.78 )
Ranked among companies with meaningful PE Ratio only.
SCHW' s PE Ratio Range Over the Past 10 Years
Min: 8.8  Med: 24.93 Max: 52.57
Current: 31.78
8.8
52.57
Forward PE Ratio 26.81
SCHW's Forward PE Ratio is ranked lower than
92% of the 72 Companies
in the Global Capital Markets industry.

( Industry Median: 17.89 vs. SCHW: 26.81 )
Ranked among companies with meaningful Forward PE Ratio only.
N/A
PE Ratio without NRI 31.78
SCHW's PE Ratio without NRI is ranked lower than
71% of the 487 Companies
in the Global Capital Markets industry.

( Industry Median: 20.12 vs. SCHW: 31.78 )
Ranked among companies with meaningful PE Ratio without NRI only.
SCHW' s PE Ratio without NRI Range Over the Past 10 Years
Min: 11.59  Med: 27.48 Max: 52.57
Current: 31.78
11.59
52.57
Price-to-Owner-Earnings 55.04
SCHW's Price-to-Owner-Earnings is ranked lower than
86% of the 219 Companies
in the Global Capital Markets industry.

( Industry Median: 16.83 vs. SCHW: 55.04 )
Ranked among companies with meaningful Price-to-Owner-Earnings only.
SCHW' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 7.06  Med: 22.14 Max: 141.47
Current: 55.04
7.06
141.47
PB Ratio 4.09
SCHW's PB Ratio is ranked lower than
83% of the 685 Companies
in the Global Capital Markets industry.

( Industry Median: 1.27 vs. SCHW: 4.09 )
Ranked among companies with meaningful PB Ratio only.
SCHW' s PB Ratio Range Over the Past 10 Years
Min: 1.79  Med: 3.52 Max: 8.28
Current: 4.09
1.79
8.28
PS Ratio 7.36
SCHW's PS Ratio is ranked lower than
68% of the 662 Companies
in the Global Capital Markets industry.

( Industry Median: 3.75 vs. SCHW: 7.36 )
Ranked among companies with meaningful PS Ratio only.
SCHW' s PS Ratio Range Over the Past 10 Years
Min: 2.64  Med: 5.37 Max: 7.56
Current: 7.36
2.64
7.56
Price-to-Free-Cash-Flow 78.42
SCHW's Price-to-Free-Cash-Flow is ranked lower than
92% of the 202 Companies
in the Global Capital Markets industry.

( Industry Median: 14.74 vs. SCHW: 78.42 )
Ranked among companies with meaningful Price-to-Free-Cash-Flow only.
SCHW' s Price-to-Free-Cash-Flow Range Over the Past 10 Years
Min: 5.76  Med: 19.35 Max: 113.36
Current: 78.42
5.76
113.36
Price-to-Operating-Cash-Flow 56.46
SCHW's Price-to-Operating-Cash-Flow is ranked lower than
89% of the 227 Companies
in the Global Capital Markets industry.

( Industry Median: 13.51 vs. SCHW: 56.46 )
Ranked among companies with meaningful Price-to-Operating-Cash-Flow only.
SCHW' s Price-to-Operating-Cash-Flow Range Over the Past 10 Years
Min: 5.34  Med: 17 Max: 6123.33
Current: 56.46
5.34
6123.33
EV-to-EBIT 18.24
SCHW's EV-to-EBIT is ranked lower than
59% of the 492 Companies
in the Global Capital Markets industry.

( Industry Median: 14.85 vs. SCHW: 18.24 )
Ranked among companies with meaningful EV-to-EBIT only.
SCHW' s EV-to-EBIT Range Over the Past 10 Years
Min: -15  Med: 11.7 Max: 26.1
Current: 18.24
-15
26.1
EV-to-EBITDA 16.92
SCHW's EV-to-EBITDA is ranked lower than
61% of the 503 Companies
in the Global Capital Markets industry.

( Industry Median: 13.21 vs. SCHW: 16.92 )
Ranked among companies with meaningful EV-to-EBITDA only.
SCHW' s EV-to-EBITDA Range Over the Past 10 Years
Min: -12.5  Med: 10.8 Max: 21.9
Current: 16.92
-12.5
21.9
PEG Ratio 2.29
SCHW's PEG Ratio is ranked lower than
63% of the 170 Companies
in the Global Capital Markets industry.

( Industry Median: 1.60 vs. SCHW: 2.29 )
Ranked among companies with meaningful PEG Ratio only.
SCHW' s PEG Ratio Range Over the Past 10 Years
Min: 0.45  Med: 1.65 Max: 66
Current: 2.29
0.45
66
Shiller PE Ratio 39.04
SCHW's Shiller PE Ratio is ranked lower than
80% of the 88 Companies
in the Global Capital Markets industry.

( Industry Median: 24.83 vs. SCHW: 39.04 )
Ranked among companies with meaningful Shiller PE Ratio only.
SCHW' s Shiller PE Ratio Range Over the Past 10 Years
Min: 13.63  Med: 26.47 Max: 47.27
Current: 39.04
13.63
47.27

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield % 0.71
SCHW's Dividend Yield % is ranked lower than
96% of the 493 Companies
in the Global Capital Markets industry.

( Industry Median: 2.94 vs. SCHW: 0.71 )
Ranked among companies with meaningful Dividend Yield % only.
SCHW' s Dividend Yield % Range Over the Past 10 Years
Min: 0.51  Med: 0.98 Max: 2.23
Current: 0.71
0.51
2.23
Dividend Payout Ratio 0.21
SCHW's Dividend Payout Ratio is ranked higher than
92% of the 286 Companies
in the Global Capital Markets industry.

( Industry Median: 0.65 vs. SCHW: 0.21 )
Ranked among companies with meaningful Dividend Payout Ratio only.
SCHW' s Dividend Payout Ratio Range Over the Past 10 Years
Min: 0.21  Med: 0.28 Max: 0.63
Current: 0.21
0.21
0.63
3-Year Dividend Growth Rate 4.00
SCHW's 3-Year Dividend Growth Rate is ranked lower than
55% of the 221 Companies
in the Global Capital Markets industry.

( Industry Median: 7.70 vs. SCHW: 4.00 )
Ranked among companies with meaningful 3-Year Dividend Growth Rate only.
SCHW' s 3-Year Dividend Growth Rate Range Over the Past 10 Years
Min: 0  Med: 6.8 Max: 39.3
Current: 4
0
39.3
Forward Dividend Yield % 0.77
SCHW's Forward Dividend Yield % is ranked lower than
96% of the 472 Companies
in the Global Capital Markets industry.

( Industry Median: 3.02 vs. SCHW: 0.77 )
Ranked among companies with meaningful Forward Dividend Yield % only.
N/A
5-Year Yield-on-Cost % 0.77
SCHW's 5-Year Yield-on-Cost % is ranked lower than
93% of the 622 Companies
in the Global Capital Markets industry.

( Industry Median: 3.18 vs. SCHW: 0.77 )
Ranked among companies with meaningful 5-Year Yield-on-Cost % only.
SCHW' s 5-Year Yield-on-Cost % Range Over the Past 10 Years
Min: 0.55  Med: 1.07 Max: 2.43
Current: 0.77
0.55
2.43
3-Year Average Share Buyback Ratio -0.70
SCHW's 3-Year Average Share Buyback Ratio is ranked higher than
55% of the 298 Companies
in the Global Capital Markets industry.

( Industry Median: -1.50 vs. SCHW: -0.70 )
Ranked among companies with meaningful 3-Year Average Share Buyback Ratio only.
SCHW' s 3-Year Average Share Buyback Ratio Range Over the Past 10 Years
Min: -5.1  Med: -1 Max: 4.4
Current: -0.7
-5.1
4.4

Valuation & Return

vs
industry
vs
history
Price-to-Tangible-Book 4.59
SCHW's Price-to-Tangible-Book is ranked lower than
84% of the 645 Companies
in the Global Capital Markets industry.

( Industry Median: 1.27 vs. SCHW: 4.59 )
Ranked among companies with meaningful Price-to-Tangible-Book only.
SCHW' s Price-to-Tangible-Book Range Over the Past 10 Years
Min: 2.3  Med: 4.7 Max: 16.33
Current: 4.59
2.3
16.33
Price-to-Intrinsic-Value-Projected-FCF 2.97
SCHW's Price-to-Intrinsic-Value-Projected-FCF is ranked lower than
87% of the 224 Companies
in the Global Capital Markets industry.

( Industry Median: 1.23 vs. SCHW: 2.97 )
Ranked among companies with meaningful Price-to-Intrinsic-Value-Projected-FCF only.
SCHW' s Price-to-Intrinsic-Value-Projected-FCF Range Over the Past 10 Years
Min: 0.83  Med: 2.08 Max: 5.51
Current: 2.97
0.83
5.51
Price-to-Median-PS-Value 1.37
SCHW's Price-to-Median-PS-Value is ranked lower than
73% of the 564 Companies
in the Global Capital Markets industry.

( Industry Median: 1.06 vs. SCHW: 1.37 )
Ranked among companies with meaningful Price-to-Median-PS-Value only.
SCHW' s Price-to-Median-PS-Value Range Over the Past 10 Years
Min: 0.54  Med: 1 Max: 1.52
Current: 1.37
0.54
1.52
Price-to-Peter-Lynch-Fair-Value 2.15
SCHW's Price-to-Peter-Lynch-Fair-Value is ranked lower than
72% of the 102 Companies
in the Global Capital Markets industry.

( Industry Median: 1.24 vs. SCHW: 2.15 )
Ranked among companies with meaningful Price-to-Peter-Lynch-Fair-Value only.
SCHW' s Price-to-Peter-Lynch-Fair-Value Range Over the Past 10 Years
Min: 0.62  Med: 2.12 Max: 27.13
Current: 2.15
0.62
27.13
Price-to-Graham-Number 2.62
SCHW's Price-to-Graham-Number is ranked lower than
99.99% of the 381 Companies
in the Global Capital Markets industry.

( Industry Median: 1.13 vs. SCHW: 2.62 )
Ranked among companies with meaningful Price-to-Graham-Number only.
SCHW' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0  Med: 2.64 Max: 9.15
Current: 2.62
0
9.15
Earnings Yield (Greenblatt) % 5.44
SCHW's Earnings Yield (Greenblatt) % is ranked higher than
58% of the 695 Companies
in the Global Capital Markets industry.

( Industry Median: 3.44 vs. SCHW: 5.44 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) % only.
SCHW' s Earnings Yield (Greenblatt) % Range Over the Past 10 Years
Min: 3.8  Med: 6.9 Max: 7370.3
Current: 5.44
3.8
7370.3
Forward Rate of Return (Yacktman) % 17.05
SCHW's Forward Rate of Return (Yacktman) % is ranked higher than
64% of the 220 Companies
in the Global Capital Markets industry.

( Industry Median: 10.00 vs. SCHW: 17.05 )
Ranked among companies with meaningful Forward Rate of Return (Yacktman) % only.
SCHW' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -5.6  Med: 16.9 Max: 33.9
Current: 17.05
-5.6
33.9

More Statistics

Revenue (TTM) (Mil) $7,473
EPS (TTM) $ 1.30
Beta1.85
Short Percentage of Float1.69%
52-Week Range $23.00 - 42.61
Shares Outstanding (Mil)1,325.67

Analyst Estimate

Dec17 Dec18 Dec19
Revenue (Mil $) 8,369 9,455 10,112
EPS ($) 1.53 1.96 2.09
EPS without NRI ($) 1.53 1.96 2.09
EPS Growth Rate
(Future 3Y To 5Y Estimate)
14.50%
Dividends per Share ($) 0.32 0.44 0.49
» More Articles for SCHW

Headlines

Articles On GuruFocus.com
Baron Opportunity Fund Comments on The Charles Schwab Corp Feb 21 2017 
Baron Opportunity Fund Shareholder 4th Quarter Commentary Feb 21 2017 
Baron Funds' Baron Fifth Avenue Growth Fund Comments on The Charles Schwab Corp Feb 13 2017 
Baron Funds' Baron Fifth Avenue Growth Fund 4th Quarter Commentary Feb 13 2017 
5 Companies Hit 52-Week Highs Jan 31 2017 
Baron Asset Fund Comments on The Charles Schwab Corp Jan 30 2017 
Baron Asset Fund 4th Quarter Shareholder Letter Jan 30 2017 
Jerome Dodson Comments on Charles Schwab Jan 25 2017 
Dodge & Cox's Global Stock Fund 4th Quarter Commentary Jan 17 2017 
David Rolfe Comments on Charles Schwab Jan 16 2017 

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