The Charles Schwab Corporation
The Charles Schwab Corporation Fundamental Analysis
The Charles Schwab Corporation (SCHW-PJ) shows moderate financial fundamentals with a PE ratio of 16.88, profit margin of 33.26%, and ROE of 19.08%. The company generates $29.0B in annual revenue with moderate year-over-year growth of 6.45%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 72.2/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze SCHW-PJ's fundamental strength across five key dimensions:
Efficiency Score
WeakSCHW-PJ struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSCHW-PJ trades at attractive valuation levels.
Growth Score
ExcellentSCHW-PJ delivers strong and consistent growth momentum.
Financial Health Score
ExcellentSCHW-PJ maintains a strong and stable balance sheet.
Profitability Score
ExcellentSCHW-PJ achieves industry-leading margins.
Key Financial Metrics
Is SCHW-PJ Expensive or Cheap?
P/E Ratio
SCHW-PJ trades at 16.88 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, SCHW-PJ's PEG of 0.32 indicates potential undervaluation.
Price to Book
The market values The Charles Schwab Corporation at 3.23 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 12.12 times EBITDA. This signals the market has high growth expectations.
How Well Does SCHW-PJ Make Money?
Net Profit Margin
For every $100 in sales, The Charles Schwab Corporation keeps $33.26 as profit after all expenses.
Operating Margin
Core operations generate 44.89 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.08 in profit for every $100 of shareholder equity.
ROA
The Charles Schwab Corporation generates $1.91 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Charles Schwab Corporation generates strong operating cash flow of $10.53B, reflecting robust business health.
Free Cash Flow
The Charles Schwab Corporation generates strong free cash flow of $9.95B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.57 in free cash annually.
FCF Yield
SCHW-PJ converts 6.14% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.88
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.32
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.23
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.59
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.67
vs 25 benchmark
Current Ratio
Current assets to current liabilities
12.41
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How SCHW-PJ Stacks Against Its Sector Peers
| Metric | SCHW-PJ Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.88 | 18.85 | Better (Cheaper) |
| ROE | 19.08% | 820.00% | Weak |
| Net Margin | 33.26% | 1999.00% | Weak |
| Debt/Equity | 0.67 | 1.01 | Strong (Low Leverage) |
| Current Ratio | 12.41 | 673.75 | Strong Liquidity |
| ROA | 1.91% | -23583.00% (disorted) | Weak |
SCHW-PJ outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Charles Schwab Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
84.31%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
116.39%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
9.58%
Industry Style: Value, Dividend, Cyclical
Growing