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 233 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 correct valuation and a medium 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.
SCHW had positive earnings in each of the past 5 years.
In the past 5 years SCHW always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 1.30%, SCHW is not doing good in the industry: 61.37% of the companies in the same industry are doing better.
Looking at the Return On Equity, with a value of 12.16%, SCHW is in the better half of the industry, outperforming 67.81% of the companies in the same industry.
SCHW has a Return On Invested Capital of 1.98%. This is in the lower half of the industry: SCHW underperforms 66.52% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SCHW is significantly below the industry average of 7.84%.
The 3 year average ROIC (1.61%) for SCHW is below the current ROIC(1.98%), indicating increased profibility in the last year.
| 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
The Profit Margin of SCHW (22.99%) is better than 65.67% of its industry peers.
In the last couple of years the Profit Margin of SCHW has declined.
SCHW's Operating Margin of 32.31% is in line compared to the rest of the industry. SCHW outperforms 56.22% of its industry peers.
SCHW's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 78.11%, SCHW belongs to the top of the industry, outperforming 83.26% of the companies in the same industry.
SCHW's Gross Margin has declined in the last couple of years.
| 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.
SCHW has a better debt/assets ratio than last year.
2.2 Solvency
SCHW has an Altman-Z score of -0.23. This is a bad value and indicates that SCHW is not financially healthy and even has some risk of bankruptcy.
SCHW has a Altman-Z score of -0.23. This is in the lower half of the industry: SCHW underperforms 79.40% 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.
Looking at the Debt to FCF ratio, with a value of 29.22, SCHW is in line with its industry, outperforming 45.49% of the companies in the same industry.
SCHW has a Debt/Equity ratio of 5.78. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of SCHW (5.78) is worse than 87.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.78 | ||
| Debt/FCF | 29.22 | ||
| Altman-Z | -0.23 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.31 indicates that SCHW may have some problems paying its short term obligations.
The Current ratio of SCHW (0.31) is worse than 84.98% of its industry peers.
SCHW has a Quick 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.
With a Quick ratio value of 0.31, SCHW is not doing good in the industry: 84.98% of the companies in the same industry are doing better.
| 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.
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.
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 Y35.41%
EPS Next 2Y26.78%
EPS Next 3Y23.74%
EPS Next 5Y18.93%
Revenue Next Year16.16%
Revenue Next 2Y13.25%
Revenue Next 3Y11.64%
Revenue Next 5Y11.09%
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.
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
SCHW is valuated quite expensively with a Price/Earnings ratio of 25.73.
SCHW's Price/Earnings ratio is a bit more expensive when compared to the industry. SCHW is more expensive than 64.38% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.28. SCHW is around the same levels.
The Price/Forward Earnings ratio is 17.48, which indicates a rather expensive current valuation of SCHW.
SCHW's Price/Forward Earnings ratio is in line with the industry average.
SCHW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.73 | ||
| Fwd PE | 17.48 |
4.2 Price Multiples
SCHW's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. SCHW is cheaper than 80.26% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, SCHW is valued a bit cheaper than 62.66% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.95 | ||
| EV/EBITDA | 15.38 |
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 23.74% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.73
PEG (5Y)7.1
EPS Next 2Y26.78%
EPS Next 3Y23.74%
5. Dividend
5.1 Amount
SCHW has a Yearly Dividend Yield of 1.21%.
Compared to an average industry Dividend Yield of 8.00, SCHW is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.42, SCHW's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.21% |
5.2 History
On average, the dividend of SCHW grows each year by 8.99%, which is quite nice.
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
38.32% of the earnings are spent on dividend by SCHW. This is a low number and sustainable payout ratio.
The dividend of SCHW is growing, but earnings are growing more, so the dividend growth is sustainable.
DP38.32%
EPS Next 2Y26.78%
EPS Next 3Y23.74%
91.34
+0.17 (+0.19%)
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 Change22.34%
Market Cap165.96B
Analysts80.69
Price Target93.3 (2.15%)
Short Float %1.02%
Short Ratio2.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.21% |
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)4.13%
PT rev (3m)3.02%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.13%
EPS NY rev (1m)0.22%
EPS NY rev (3m)2.19%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.52%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.73 | ||
| Fwd PE | 17.48 | ||
| P/S | 6.33 | ||
| P/FCF | 16.95 | ||
| P/OCF | 15.99 | ||
| P/B | 3.35 | ||
| P/tB | 5.54 | ||
| EV/EBITDA | 15.38 |
EPS(TTM)3.55
EY3.89%
EPS(NY)5.22
Fwd EY5.72%
FCF(TTM)5.39
FCFY5.9%
OCF(TTM)5.71
OCFY6.25%
SpS14.42
BVpS27.25
TBVpS16.48
PEG (NY)0.73
PEG (5Y)7.1
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 | -0.23 |
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 Y35.41%
EPS Next 2Y26.78%
EPS Next 3Y23.74%
EPS Next 5Y18.93%
Revenue 1Y (TTM)2.32%
Revenue growth 3Y11.03%
Revenue growth 5Y17.15%
Sales Q2Q%18.12%
Revenue Next Year16.16%
Revenue Next 2Y13.25%
Revenue Next 3Y11.64%
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%