Analyzing Charles Schwab (SCHW) and The Competition

Charles Schwab (NYSE: SCHW) is one of 100 publicly-traded companies in the “INVEST BKRS/MGMT” industry, but how does it weigh in compared to its competitors? We will compare Charles Schwab to similar companies based on the strength of its profitability, valuation, institutional ownership, risk, dividends, analyst recommendations and earnings.

Institutional & Insider Ownership

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80.6% of Charles Schwab shares are owned by institutional investors. Comparatively, 51.9% of shares of all “INVEST BKRS/MGMT” companies are owned by institutional investors. 12.0% of Charles Schwab shares are owned by insiders. Comparatively, 17.5% of shares of all “INVEST BKRS/MGMT” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Charles Schwab has a beta of 1.58, suggesting that its share price is 58% more volatile than the S&P 500. Comparatively, Charles Schwab’s competitors have a beta of 3.51, suggesting that their average share price is 251% more volatile than the S&P 500.

Earnings & Valuation

This table compares Charles Schwab and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Charles Schwab $8.62 billion $2.35 billion 34.60
Charles Schwab Competitors $2.60 billion $410.31 million -25.75

Charles Schwab has higher revenue and earnings than its competitors. Charles Schwab is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Charles Schwab and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Charles Schwab 1 6 8 0 2.47
Charles Schwab Competitors 660 3500 3905 166 2.43

Charles Schwab presently has a consensus target price of $54.23, suggesting a potential downside of 2.66%. As a group, “INVEST BKRS/MGMT” companies have a potential upside of 6.35%. Given Charles Schwab’s competitors higher probable upside, analysts plainly believe Charles Schwab has less favorable growth aspects than its competitors.

Dividends

Charles Schwab pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. Charles Schwab pays out 24.8% of its earnings in the form of a dividend. As a group, “INVEST BKRS/MGMT” companies pay a dividend yield of 2.5% and pay out 57.3% of their earnings in the form of a dividend. Charles Schwab has raised its dividend for 2 consecutive years.

Profitability

This table compares Charles Schwab and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Charles Schwab 27.32% 16.03% 1.04%
Charles Schwab Competitors 12.58% 6.41% 7.80%

Summary

Charles Schwab beats its competitors on 9 of the 15 factors compared.

About Charles Schwab

The Charles Schwab Corporation (CSC) is a savings and loan holding company. The Company, through its subsidiaries, engages in wealth management, securities brokerage, banking, money management and financial advisory services. The Company provides financial services to individuals and institutional clients 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. The Advisor Services segment provides custodial, trading, and support services as well as retirement business services. The Company offers a range of products to address individuals’ varying investment and financial needs. Its product offerings include brokerage, mutual funds, ETFs, advice solutions, banking and trust. Brokerage provides a range of brokerage accounts with cash management capabilities. Mutual funds offer third-party mutual funds through the Mutual Fund Marketplace.

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