SCHW Investment Analysis Report & Stock Research, The Charles Schwab Corp.

The Charles Schwab Corporation (SCHW)

SCHW Stock Report

2-Year Price History

View Larger SCHW Chart
NYSE:SCHW
$18.79
(3/18 4:00PM)
+1.6%
Open$18.39 Mkt Cap$22.4 Billion
High$18.82 52Wk High$19.87
Low$18.39 52Wk Low$14.71
Volume8.9 Million Avg Vol 10D11.1 Million

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SCHW Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at SCHW through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 5.85x and 3.13x respectively.

Utilizing this range we can see that SCHW’s current Price to Sales per share ratio of 4.91x is above its historical average only slightly. So, while not a major concern it is worth noting that from a value perspective SCHW does not look undervalued on a Price to Sales basis. However, were the Price to Sales ratio to drop by 9% (the historical average) then we would become more positive on this stock.

SCHW Cash Earnings

Looking at SCHW specifically in their Cash Earnings capabilities, Ockham views SCHW as above its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 9 years of cash earnings levels for SCHW to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 34.04 and a 18.84 low over the same period.

So, again, with a current Price to Cash Earnings per share ratio of 27.92, SCHW is presently above its historical range. Ockham Research is always focused upon the value that investors have placed upon a given metric in the past. In other words, how much would an investor pay for a particular level of Cash Earnings in terms of stock price, and how does that relate to today. Naturally, we utilize proprietary methods to accomplish this, but the basic premise holds true and is simple to understand. For SCHW, we are a bit negative on the Cash Earnings level given its higher than historical norm.

SCHW Dividends

A positive Ockham rating does not require a company to pay out an inviting dividend or a dividend at all. However, we believe dividends provide a useful measure of a company's inherent expectations.

Comparable to our analysis of Sales and Cash Earnings per share, we examine dividend yields from SCHW against the historic high and low levels over an available data range. Because SCHW has an established history of paying a dividend to shareholders, there is value in comparing recent dividends to historical dividends. In SCHW’s case, the estimated annual dividend is $0.24 producing a current dividend yield of 1.30%. The highest dividend yield from SCHW in recent history was 2.18% while the lowest dividend yield was 0.12%. Management at SCHW has encouraged us with a current dividend yield of 13.04% above the historical median.

Peer Comparison

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The Charles Schwab Corp. Industry Grouping

(3/18/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including SCHW) 39.54 6.17 » 53.23 4.02 1.22 » 7.96 15.03% 14.97%
*10 year range does not include current year values
Franklin Resources, Inc. BEN $25.5 Billion $111.59 21.84 9.50 » 26.68 5.14 1.99 » 5.58 3.90% 19.22%
The Charles Schwab Corp. SCHW $22.4 Billion $18.79 27.92 8.37 » 310.93 4.91 1.96 » 8.71 -0.02% 30.12%
CME Group, Inc. CME $20.7 Billion $310.89 19.23 7.78 » 47.81 8.02 2.59 » 21.70 29.48% 13.54%
Capital One Financial Corp. COF $18.6 Billion $40.84 56.99 5.05 » 61.31 1.14 0.22 » 2.43 8.37% 6.44%
Administradora de Fondos de Pensiones Provida S A ADR PVD $15.2 Billion $46.00 81.56 4.72 » 80.09 2.44 0.72 » 4.14 7.67% 14.99%
Brookfield Asset Management, Inc. BAM $14.4 Billion $25.23 18.07 3.80 » 50.27 3.36 0.57 » 5.93 25.75% 20.66%
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Closing Bell

Closing Bell Brings News Related to The Charles Schwab Corporation

Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on SCHW from Closing Bell.

The Motley Fool CAPS data suggests that investors believe The Charles Schwab Corporation will beat the market in the foreseeable future. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on SCHW. When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that The Charles Schwab Corporation has been talked about more than normal recently.

“… Tdd# 1-800-345-2550 that's why, at SCHWAB, tdd# 1-800-345-2550 every online equity trade is now $8. 95 tdd# 1-800-345-2550 no matter your account balance, how often you trade ... …”

Squawk On The Street

The Charles Schwab Corporation News is Being Covered Right Now on Squawk On The Street

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to The Charles Schwab Corporation.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Squawk On The Street said about THE CHARLES SCHWAB CORP.

Learn About RazorWire?
Squawk On The Street

Squawk On The Street Brings News Related to The Charles Schwab Corporation

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to The Charles Schwab Corporation.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Squawk On The Street said about THE CHARLES SCHWAB CORP.

Learn About RazorWire?
Asia Confidential

The Outlook for Emerging Markets and The Charles Schwab Corporation Discussed on Asia Confidential

For growth, there is nowhere growing more rapidly than emerging markets. Recently, Asia Confidential talked about emerging markets and their impact on The Charles Schwab Corporation.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Asia Confidential said about THE CHARLES SCHWAB CORP.

Learn About RazorWire?
Asia Confidential

Delevoping Economies and Where SCHW Fits In on Asia Confidential

The Charles Schwab Corporation and an emerging market growth strategy were discussed recently on SCHW.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Asia Confidential said about THE CHARLES SCHWAB CORP.

Learn About RazorWire?
Asia Confidential

Asia Confidential Has News on SCHW

As always, the latest news on SCHW is available to Ockham clients through RazorWire, and it was mentioned recently on Asia Confidential.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Asia Confidential said about THE CHARLES SCHWAB CORP.

Learn About RazorWire?
Closing Bell

Holding SCHW Stock? See What Is Being Discussed on Closing Bell

As always, the latest news on SCHW is available to Ockham clients through RazorWire, and it was mentioned recently on Closing Bell.

The Motley Fool CAPS data suggests that investors believe The Charles Schwab Corporation will beat the market in the foreseeable future. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, SCHW has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on SCHW.

“… Tdd# 1-800-345-2550 that's why, at SCHWAB, tdd# 1-800-345-2550 every online equity trade is now $8. 95 tdd# 1-800-345-2550 no matter your account balance, how often you trade ... …”

Squawk On The Street

See Why The Charles Schwab Corporation News Was Discussed on Squawk On The Street

Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on SCHW from Squawk On The Street.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Squawk On The Street said about THE CHARLES SCHWAB CORP.

Learn About RazorWire?
Deal Breaker

Interested in SCHW? See What the Pundits Said on Deal Breaker

News has broken via the television and viral blogs regarding SCHW, so investors should take an interest in learning what was said.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, SCHW has been less covered in the news compared to the rest of our universe of stocks. The Motley Fool CAPS data suggests that investors believe The Charles Schwab Corporation will beat the market in the foreseeable future. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on SCHW.

“… As someone whose spent months trading his online brokerage account, bonded with the CHARLES SCHWAB guys (Encino branch) and taken several meetings with employees of Goldman ... …”

Deal Breaker

See Who is Talking About News from SCHW on Deal Breaker

The Charles Schwab Corporation is one of the thousands of companies that Ockham has news analytics on, and it was recently discussed on Deal Breaker.

The Charles Schwab Corporation receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; SCHW has received less coverage from the financial media in business television and blogs. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… As of the morning of our lunch, Shia says his online SCHWAB Active Trading account had grown to close to $450,000. He’s So Money. …”

View All The Charles Schwab Corp. Stock News

Key Fundamentals

SCHW - The Charles Schwab Corporation Fundamentals
Price (3/18 4:00PM) $18.79
Volume (3/18 4:00PM) 8.9 Million
Last Close Price $18.49
10 Day Average Volume 11.1 Million
13 Week Price Range $17.39 - $19.85
52 Week Price Range $14.71 - $19.87
LTM Revenue $4.5 Billion
 
Shares Outstanding (12/2009) 1.2 Billion
Market Capitalization $22.4 Billion
Shares Held By Institutions 809.1 Million
Institutional Holders 797
% Shares Held By Institutions 69.70%
Earnings Per Share (EPS) $0.68
P/E Ratio 27.60
Book Value Per Share $4.26
 
Gross Margin n/a%
Annual Dividend 0.24
Dividend Yield 1.30%
Beta 1.24
Fiscal Year Ends December

About The Charles Schwab Corp.

The Charles Schwab Corporation is considered to operate in the Financial sector. They specifically operate in the Investmnt Brokerage-National business segment contained within the Financial Services industry.

A savings and loan holding company, which through its subsidiaries is engaged in securities brokerage, banking and related financial services.