Analysis of the Charles Schwab Corporation Stock. Is It a Buy?

The Charles Schwab Corporation provides wealth management, securities brokerage, banking, asset management, and financial advisory services. As of May 31, 2022, they had $7.3 trillion under management. It is one of the leading ways that people use to invest with 34 million active brokerage accounts. They also have 1.7 million banking accounts attached. They are a huge player in the financial services market. 

The company is currently valued at $130.86 billion. They are also trading at a p/e ratio of 22.62 at time of writing. In 2021, the company brought in $18.52 billion in revenue and profited $5.86 billion. Compare that to 2020 where they brought in $11.69 billion and profited $3.3 billion. The year before that they brought in $10.72 billion and profited $3.7 billion. 

The stock does offer a dividend yield of 1.28% which comes out to 88 cents a share. Over the last three years Charles Schwab has grown its earnings per share by 4.7% a year. This is good for shareholders of the company. 

One thing that has helped Charles Schwab with their growth is the acquisition of TD Ameritrade in 2020. Acquiring TD Ameritrade gave the company around 12 million client accounts, $1.3 trillion in client assets, and around 5 billion dollars in annual revenues. This allowed Charles Schwab to scale beyond its organic growth. 

Because the stock is already trading at 22.62 times earnings, we currently give the stock a rating of HOLD.

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