SCHWAB (CHARLES) CORP (SCHW) Stock Fundamental Analysis
NYSE:SCHW - New York Stock Exchange, Inc. - US8085131055 - Common Stock - Currency: USD
SCHW gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 232 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 has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years SCHW has been profitable.
Each year in the past 5 years SCHW had a positive operating cash flow.
1.2 Ratios
SCHW's Return On Assets of 1.30% is on the low side compared to the rest of the industry. SCHW is outperformed by 62.07% of its industry peers.
SCHW has a better Return On Equity (12.16%) than 65.95% of its industry peers.
Looking at the Return On Invested Capital, with a value of 1.98%, SCHW is doing worse than 66.81% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SCHW is significantly below the industry average of 7.88%.
The last Return On Invested Capital (1.98%) for SCHW is above the 3 year average (1.61%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.3% | ||
| ROE | 12.16% | ||
| ROIC | 1.98% |
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
With a decent Profit Margin value of 22.99%, SCHW is doing good in the industry, outperforming 64.22% of the companies in the same industry.
SCHW's Profit Margin has declined in the last couple of years.
SCHW has a Operating Margin of 32.31%. This is comparable to the rest of the industry: SCHW outperforms 55.60% of its industry peers.
SCHW's Operating Margin has declined in the last couple of years.
SCHW has a better Gross Margin (78.11%) than 82.76% of its industry peers.
In the last couple of years the Gross Margin of SCHW has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 32.31% | ||
| PM (TTM) | 22.99% | ||
| GM | 78.11% |
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
Compared to 1 year ago, SCHW has more shares outstanding
The number of shares outstanding for SCHW has been increased compared to 5 years ago.
The debt/assets ratio for SCHW has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of -0.24, we must say that SCHW is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of SCHW (-0.24) is worse than 79.31% of its industry peers.
SCHW has a debt to FCF ratio of 29.22. This is a negative value and a sign of low solvency as SCHW would need 29.22 years to pay back of all of its debts.
SCHW has a Debt to FCF ratio of 29.22. This is comparable to the rest of the industry: SCHW outperforms 44.40% of its industry peers.
A Debt/Equity ratio of 5.78 is on the high side and indicates that SCHW has dependencies on debt financing.
With a Debt to Equity ratio value of 5.78, SCHW is not doing good in the industry: 87.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.78 | ||
| Debt/FCF | 29.22 | ||
| Altman-Z | -0.24 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
SCHW has a Current Ratio of 0.31. This is a bad value and indicates that SCHW is not financially healthy enough and could expect problems in meeting its short term obligations.
SCHW has a Current ratio of 0.31. This is amonst the worse of the industry: SCHW underperforms 84.91% of its industry peers.
A Quick Ratio of 0.31 indicates that SCHW may have some problems paying its short term obligations.
SCHW has a Quick ratio of 0.31. This is amonst the worse of the industry: SCHW underperforms 84.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.31 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 20.75% over the past year.
Measured over the past 5 years, SCHW shows a small growth in Earnings Per Share. The EPS has been growing by 3.62% on average per year.
Looking at the last year, SCHW shows a small growth in Revenue. The Revenue has grown by 2.32% in the last year.
The Revenue has been growing by 17.15% on average over the past years. This is quite good.
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 18.93% on average per year.
SCHW is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.09% yearly.
EPS Next Y35.1%
EPS Next 2Y26.9%
EPS Next 3Y24.07%
EPS Next 5Y18.93%
Revenue Next Year16.22%
Revenue Next 2Y13.33%
Revenue Next 3Y11.75%
Revenue Next 5Y11.09%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.61, the valuation of SCHW can be described as rather expensive.
SCHW's Price/Earnings ratio is a bit more expensive when compared to the industry. SCHW is more expensive than 64.22% of the companies in the same industry.
When comparing the Price/Earnings ratio of SCHW to the average of the S&P500 Index (26.31), we can say SCHW is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 16.69, the valuation of SCHW can be described as correct.
The rest of the industry has a similar Price/Forward Earnings ratio as SCHW.
The average S&P500 Price/Forward Earnings ratio is at 22.13. SCHW is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.61 | ||
| Fwd PE | 16.69 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SCHW is valued a bit cheaper than the industry average as 79.74% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, SCHW is valued a bit cheaper than 61.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.21 | ||
| EV/EBITDA | 14.68 |
4.3 Compensation for Growth
SCHW's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as SCHW's earnings are expected to grow with 24.07% in the coming years.
PEG (NY)0.7
PEG (5Y)6.79
EPS Next 2Y26.9%
EPS Next 3Y24.07%
5. Dividend
5.1 Amount
SCHW has a Yearly Dividend Yield of 1.22%. Purely for dividend investing, there may be better candidates out there.
SCHW's Dividend Yield is slightly below the industry average, which is at 7.98.
With a Dividend Yield of 1.22, SCHW pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
5.2 History
The dividend of SCHW is nicely growing with an annual growth rate of 8.99%!
SCHW has paid a dividend for at least 10 years, which is a reliable track record.
SCHW has decreased its dividend recently.
Dividend Growth(5Y)8.99%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
38.32% of the earnings are spent on dividend by SCHW. This is a low number and sustainable payout ratio.
SCHW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP38.32%
EPS Next 2Y26.9%
EPS Next 3Y24.07%
87.36
-1.14 (-1.29%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners84.63%
Inst Owner Change1.3%
Ins Owners5.98%
Ins Owner Change24.14%
Market Cap158.73B
Analysts80.69
Price Target92.23 (5.57%)
Short Float %1.03%
Short Ratio1.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.22% |
Yearly Dividend1.25
Dividend Growth(5Y)8.99%
DP38.32%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.72%
Min EPS beat(2)1.21%
Max EPS beat(2)8.23%
EPS beat(4)3
Avg EPS beat(4)2.49%
Min EPS beat(4)-0.17%
Max EPS beat(4)8.23%
EPS beat(8)6
Avg EPS beat(8)2.26%
EPS beat(12)9
Avg EPS beat(12)2.05%
EPS beat(16)11
Avg EPS beat(16)1.34%
Revenue beat(2)1
Avg Revenue beat(2)0.11%
Min Revenue beat(2)-0.5%
Max Revenue beat(2)0.72%
Revenue beat(4)1
Avg Revenue beat(4)-0.54%
Min Revenue beat(4)-1.76%
Max Revenue beat(4)0.72%
Revenue beat(8)1
Avg Revenue beat(8)-1.18%
Revenue beat(12)5
Avg Revenue beat(12)2.73%
Revenue beat(16)7
Avg Revenue beat(16)2.07%
PT rev (1m)2.94%
PT rev (3m)1.88%
EPS NQ rev (1m)0.39%
EPS NQ rev (3m)4.98%
EPS NY rev (1m)0%
EPS NY rev (3m)2.41%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.91%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.61 | ||
| Fwd PE | 16.69 | ||
| P/S | 6.06 | ||
| P/FCF | 16.21 | ||
| P/OCF | 15.29 | ||
| P/B | 3.21 | ||
| P/tB | 5.3 | ||
| EV/EBITDA | 14.68 |
EPS(TTM)3.55
EY4.06%
EPS(NY)5.23
Fwd EY5.99%
FCF(TTM)5.39
FCFY6.17%
OCF(TTM)5.71
OCFY6.54%
SpS14.42
BVpS27.25
TBVpS16.48
PEG (NY)0.7
PEG (5Y)6.79
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.3% | ||
| ROE | 12.16% | ||
| ROCE | 11.93% | ||
| ROIC | 1.98% | ||
| ROICexc | 2.21% | ||
| ROICexgc | 2.47% | ||
| OM | 32.31% | ||
| PM (TTM) | 22.99% | ||
| GM | 78.11% | ||
| FCFM | 37.37% |
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-Score9
Asset Turnover0.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.78 | ||
| Debt/FCF | 29.22 | ||
| Debt/EBITDA | 28.92 | ||
| Cap/Depr | 41.29% | ||
| Cap/Sales | 2.24% | ||
| Interest Coverage | 1.44 | ||
| Cash Conversion | 104.93% | ||
| Profit Quality | 162.54% | ||
| Current Ratio | 0.31 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | -0.24 |
F-Score9
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 5Y18.93%
Revenue 1Y (TTM)2.32%
Revenue growth 3Y11.03%
Revenue growth 5Y17.15%
Sales Q2Q%18.12%
Revenue Next Year16.22%
Revenue Next 2Y13.33%
Revenue Next 3Y11.75%
Revenue Next 5Y11.09%
EBIT growth 1Y33.18%
EBIT growth 3Y-1.2%
EBIT growth 5Y10.19%
EBIT Next Year47.79%
EBIT Next 3Y23.5%
EBIT Next 5Y17.53%
FCF growth 1Y23.19%
FCF growth 3Y19.48%
FCF growth 5Y-24.96%
OCF growth 1Y18.19%
OCF growth 3Y8.03%
OCF growth 5Y-22.13%