Schwab Charles Corp (SCHW.PD) stock analysis

P/E below its 5-year median

Schwab Charles's P/E of 16.2 is below its own 5-year median of 24.5.

P/E above the industry

Schwab Charles's P/E of 16.2 is above the Security Brokers, Dealers, and Flotation median of 15.3.

EV/EBITDA against its history

Needs positive EBITDA and price history.

P/B above the industry

Schwab Charles's price-to-book of 3.08 is above the Security Brokers, Dealers, and Flotation median of 3.08.

Trading below fair value

The share price of $89.28 is below our fair value estimate of $94.18.

Margin of safety under 20%

The price is 5.2% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 4.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 9.9% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 38.6% over the last twelve months, against a 5-year average of 21.8% a year.

Growing slower than the industry

Revenue grew 20.3% over the last twelve months; the Security Brokers, Dealers, and Flotation median is 20.3%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 20.3% over the last twelve months and averaged 14.1% over five years; we look for 15% on both.

Return on invested capital

Needs operating income and invested capital.

Return on equity above the industry

Schwab Charles's return on equity of 20.3% is above the Security Brokers, Dealers, and Flotation median of 17.9%.

Earnings grew over 5 years

Net income grew 21.8% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 38.8% over the last twelve months, against a 5-year average of 32.1%.

Net margin above the industry

Schwab Charles's net margin of 38.8% is above the Security Brokers, Dealers, and Flotation median of 13.5%.

High debt

Debt is 45.2% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 24.3% five years ago to 45.2%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 50.4% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term liquidity

The balance sheet is not split into current and non-current items.

Elevated bankruptcy risk

The Altman Z-score is 0.38; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Schwab Charles paid dividends worth 1.4% of the share price over the last twelve months.

Yield below Treasuries

The 1.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.9% or more; Schwab Charles yields 1.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 23.8% of net income.

Covered by free cash flow

Dividends take 22.3% of free cash flow.