SCHWAB (CHARLES) CORP (SCHW) Stock Fundamental Analysis
NYSE:SCHW - New York Stock Exchange, Inc. - US8085131055 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to SCHW. SCHW was compared to 230 industry peers in the Capital Markets industry. While SCHW is still in line with the averages on profitability rating, there are concerns on its financial health. SCHW is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
SCHW had positive earnings in the past year.
In the past year SCHW had a positive cash flow from operations.
In the past 5 years SCHW has always been profitable.
Each year in the past 5 years SCHW had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 1.14%, SCHW is not doing good in the industry: 63.04% of the companies in the same industry are doing better.
With a decent Return On Equity value of 11.32%, SCHW is doing good in the industry, outperforming 62.61% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 1.74%, SCHW is doing worse than 65.65% of the companies in the same industry.
SCHW had an Average Return On Invested Capital over the past 3 years of 1.61%. This is significantly below the industry average of 7.27%.
The last Return On Invested Capital (1.74%) for SCHW is above the 3 year average (1.61%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.14% | ||
| ROE | 11.32% | ||
| ROIC | 1.74% |
ROA(3y)1.1%
ROA(5y)0.93%
ROE(3y)13.6%
ROE(5y)11.15%
ROIC(3y)1.61%
ROIC(5y)1.38%
1.3 Margins
The Profit Margin of SCHW (21.07%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of SCHW has declined.
SCHW has a Operating Margin of 30.17%. This is comparable to the rest of the industry: SCHW outperforms 54.78% of its industry peers.
In the last couple of years the Operating Margin of SCHW has declined.
SCHW has a Gross Margin of 75.41%. This is amongst the best in the industry. SCHW outperforms 80.87% of its industry peers.
SCHW's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.17% | ||
| PM (TTM) | 21.07% | ||
| GM | 75.41% |
OM growth 3Y-11.01%
OM growth 5Y-5.93%
PM growth 3Y-9.28%
PM growth 5Y-6.77%
GM growth 3Y-8.21%
GM growth 5Y-3.68%
2. Health
2.1 Basic Checks
SCHW has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, SCHW has more shares outstanding
SCHW has a better debt/assets ratio than last year.
2.2 Solvency
SCHW has an Altman-Z score of -0.24. This is a bad value and indicates that SCHW is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of -0.24, SCHW is doing worse than 78.70% of the companies in the same industry.
The Debt to FCF ratio of SCHW is 148.41, which is on the high side as it means it would take SCHW, 148.41 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 148.41, SCHW perfoms like the industry average, outperforming 40.43% of the companies in the same industry.
SCHW has a Debt/Equity ratio of 6.29. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 6.29, SCHW is doing worse than 85.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.29 | ||
| Debt/FCF | 148.41 | ||
| Altman-Z | -0.24 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
SCHW has a Current Ratio of 0.33. This is a bad value and indicates that SCHW is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of SCHW (0.33) is worse than 79.57% of its industry peers.
A Quick Ratio of 0.33 indicates that SCHW may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.33, SCHW is doing worse than 79.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.33 | ||
| Quick Ratio | 0.33 |
3. Growth
3.1 Past
SCHW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.75%, which is quite impressive.
The Earnings Per Share has been growing slightly by 3.62% on average over the past years.
The Revenue has been growing slightly by 2.32% in the past year.
Measured over the past years, SCHW shows a quite strong growth in Revenue. The Revenue has been growing by 17.15% on average per year.
EPS 1Y (TTM)20.75%
EPS 3Y-0.91%
EPS 5Y3.62%
EPS Q2Q%40.54%
Revenue 1Y (TTM)2.32%
Revenue growth 3Y11.03%
Revenue growth 5Y17.15%
Sales Q2Q%18.12%
3.2 Future
Based on estimates for the next years, SCHW will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.97% on average per year.
SCHW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.41% yearly.
EPS Next Y35.1%
EPS Next 2Y26.9%
EPS Next 3Y24.07%
EPS Next 5Y17.97%
Revenue Next Year16.24%
Revenue Next 2Y13.4%
Revenue Next 3Y11.75%
Revenue Next 5Y10.41%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
SCHW is valuated rather expensively with a Price/Earnings ratio of 24.67.
62.61% of the companies in the same industry are cheaper than SCHW, based on the Price/Earnings ratio.
SCHW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.03, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 16.73, the valuation of SCHW can be described as correct.
SCHW's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of SCHW to the average of the S&P500 Index (21.94), we can say SCHW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.67 | ||
| Fwd PE | 16.73 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SCHW indicates a rather cheap valuation: SCHW is cheaper than 80.87% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SCHW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 77.48 | ||
| EV/EBITDA | 15.31 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SCHW's earnings are expected to grow with 24.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.7
PEG (5Y)6.81
EPS Next 2Y26.9%
EPS Next 3Y24.07%
5. Dividend
5.1 Amount
SCHW has a Yearly Dividend Yield of 1.23%.
Compared to an average industry Dividend Yield of 8.20, SCHW is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.36, SCHW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
5.2 History
The dividend of SCHW is nicely growing with an annual growth rate of 8.99%!
SCHW has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of SCHW decreased recently.
Dividend Growth(5Y)8.99%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
41.53% of the earnings are spent on dividend by SCHW. This is a bit on the high side, but may be sustainable.
SCHW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP41.53%
EPS Next 2Y26.9%
EPS Next 3Y24.07%
87.58
-1.6 (-1.79%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners75.49%
Inst Owner Change1.21%
Ins Owners6.26%
Ins Owner Change28.19%
Market Cap158.83B
Analysts80.69
Price Target89.6 (2.31%)
Short Float %1.05%
Short Ratio1.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.23% |
Yearly Dividend1.25
Dividend Growth(5Y)8.99%
DP41.53%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.45%
Min EPS beat(2)0.66%
Max EPS beat(2)8.23%
EPS beat(4)2
Avg EPS beat(4)1.85%
Min EPS beat(4)-1.34%
Max EPS beat(4)8.23%
EPS beat(8)6
Avg EPS beat(8)2.27%
EPS beat(12)8
Avg EPS beat(12)1.1%
EPS beat(16)11
Avg EPS beat(16)1.26%
Revenue beat(2)1
Avg Revenue beat(2)0.05%
Min Revenue beat(2)-0.62%
Max Revenue beat(2)0.72%
Revenue beat(4)1
Avg Revenue beat(4)-0.77%
Min Revenue beat(4)-1.76%
Max Revenue beat(4)0.72%
Revenue beat(8)2
Avg Revenue beat(8)1.58%
Revenue beat(12)5
Avg Revenue beat(12)2.56%
Revenue beat(16)8
Avg Revenue beat(16)2.27%
PT rev (1m)-1.24%
PT rev (3m)0.45%
EPS NQ rev (1m)0.22%
EPS NQ rev (3m)2.86%
EPS NY rev (1m)2.01%
EPS NY rev (3m)2.39%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)1.35%
Revenue NY rev (1m)0.5%
Revenue NY rev (3m)0.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.67 | ||
| Fwd PE | 16.73 | ||
| P/S | 6.11 | ||
| P/FCF | 77.48 | ||
| P/OCF | 59.49 | ||
| P/B | 3.28 | ||
| P/tB | 5.54 | ||
| EV/EBITDA | 15.31 |
EPS(TTM)3.55
EY4.05%
EPS(NY)5.23
Fwd EY5.98%
FCF(TTM)1.13
FCFY1.29%
OCF(TTM)1.47
OCFY1.68%
SpS14.34
BVpS26.67
TBVpS15.81
PEG (NY)0.7
PEG (5Y)6.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.14% | ||
| ROE | 11.32% | ||
| ROCE | 11.08% | ||
| ROIC | 1.74% | ||
| ROICexc | 1.98% | ||
| ROICexgc | 2.18% | ||
| OM | 30.17% | ||
| PM (TTM) | 21.07% | ||
| GM | 75.41% | ||
| FCFM | 7.88% |
ROA(3y)1.1%
ROA(5y)0.93%
ROE(3y)13.6%
ROE(5y)11.15%
ROIC(3y)1.61%
ROIC(5y)1.38%
ROICexc(3y)1.81%
ROICexc(5y)1.55%
ROICexgc(3y)1.99%
ROICexgc(5y)1.69%
ROCE(3y)12.72%
ROCE(5y)11.16%
ROICexcg growth 3Y13.97%
ROICexcg growth 5Y4.46%
ROICexc growth 3Y12.7%
ROICexc growth 5Y2.85%
OM growth 3Y-11.01%
OM growth 5Y-5.93%
PM growth 3Y-9.28%
PM growth 5Y-6.77%
GM growth 3Y-8.21%
GM growth 5Y-3.68%
F-Score7
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.29 | ||
| Debt/FCF | 148.41 | ||
| Debt/EBITDA | 32.79 | ||
| Cap/Depr | 43.21% | ||
| Cap/Sales | 2.38% | ||
| Interest Coverage | 1.18 | ||
| Cash Conversion | 28.77% | ||
| Profit Quality | 37.42% | ||
| Current Ratio | 0.33 | ||
| Quick Ratio | 0.33 | ||
| Altman-Z | -0.24 |
F-Score7
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)57.78%
Cap/Depr(5y)71.3%
Cap/Sales(3y)3.16%
Cap/Sales(5y)3.9%
Profit Quality(3y)153.35%
Profit Quality(5y)137.38%
High Growth Momentum
Growth
EPS 1Y (TTM)20.75%
EPS 3Y-0.91%
EPS 5Y3.62%
EPS Q2Q%40.54%
EPS Next Y35.1%
EPS Next 2Y26.9%
EPS Next 3Y24.07%
EPS Next 5Y17.97%
Revenue 1Y (TTM)2.32%
Revenue growth 3Y11.03%
Revenue growth 5Y17.15%
Sales Q2Q%18.12%
Revenue Next Year16.24%
Revenue Next 2Y13.4%
Revenue Next 3Y11.75%
Revenue Next 5Y10.41%
EBIT growth 1Y16.6%
EBIT growth 3Y-1.2%
EBIT growth 5Y10.19%
EBIT Next Year55.96%
EBIT Next 3Y23.8%
EBIT Next 5Y17.44%
FCF growth 1Y-89.15%
FCF growth 3Y19.48%
FCF growth 5Y-24.96%
OCF growth 1Y-86.37%
OCF growth 3Y8.03%
OCF growth 5Y-22.13%