Charles Schwab Stock , SCHW
The Charles Schwab Corp. is a savings and loan holding company, which engages in the provision of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. It operates through the Investor Services and Advisor Services segments. The Investor Services segment includes retail brokerage and banking services to individual investors, and retirement plan services, as well as other corporate brokerage services, to businesses and their employees. The Advisor Services segment provides custodial, trading, retirement business, and support services, as well as retirement business services to independent registered investment advisors, independent retirement advisors, and record keepers. The company was founded by Charles R. Schwab in 1986 and is headquartered in Austin, TX. .
Moody’s Daily Credit Risk Score is a 1-10 score of a company’s credit risk, based on an analysis of the firm’s balance sheet and inputs from the stock market. The score provides a forward-looking, one-year measure of credit risk, allowing investors to make better decisions and streamline their work ow. Updated daily, it takes into account day-to-day movements in market value compared to a company’s liability structure.
|The Toronto-Dominion Bank /New York Branch/||14.03|
|TD Asset Management, Inc.||9.87|
|The Vanguard Group, Inc.||6.24|
|Vanguard Group, Inc. (Subfiler)||6.02|
|T. Rowe Price Associates, Inc. (Investment Management)||4.59|
|Wellington Management Co. LLP||4.45|
|Dodge & Cox||4.16|
|State Street Corp.||3.62|
|Dodge & Cox Stock Fund||2.63|
|Vanguard Total Stock Market Index Fund||2.40|
|Vanguard Wellington Fund||2.16|
|JPMorgan Investment Management, Inc.||2.16|
|Massachusetts Financial Services Co.||1.88|
|BlackRock Institutional Trust Co. NA||1.87|
Shareholder percentage totals can add to more than 100% because some holders are included in the free float.
|Charles Robert Schwab||Chairman|
|Neesha Hathi||Chief Digital Officer & Executive Vice President|
|Walter William Bettinger||Chief Executive Officer & Director|
|Peter B. Crawford||Chief Financial Officer & Executive Vice President|
|Dennis Howard||Chief Information Officer & Executive VP|
|Joseph Raymond Martinetto||Chief Operating Officer & Senior Executive VP|
|Nigel J. Murtagh||Chief Risk Officer & Executive VP-Corporate Risk|
|Tim Heier||Chief Technology Officer & Executive VP|
|Bharat B. Masrani||Director|
|Bernard J. Clark||Executive Vice President-Advisor Services|
|Catherine M. Casey||Executive Vice President-Human Resources|
|Mitch Mantua||Executive Vice President-Internal Audit|
|Lisa Kidd Hunt||Executive Vice President-International Services|
|Steven H. Anderson||Executive Vice President-Retirement Plan Services|
|Arun Sarin||Independent Director|
|Charles A. Ruffel||Independent Director|
|Christopher Vincent Dodds||Independent Director|
|Frank C. Herringer||Independent Director|
|Gerri Martin-Flickinger||Independent Director|
|Joan T. Dea||Independent Director|
|John K. Adams||Independent Director|
|Marianne C. Brown||Independent Director|
|Mark A. Goldfarb||Independent Director|
|Paula A. Sneed||Independent Director|
|Stephen A. Ellis||Independent Director|
|Todd M. Ricketts||Independent Director|
|William S. Haraf||Independent Director|
|Linda Short||Managing Director-Corporate Real Estate|
|Peter J. Morgan||Secretary, Executive VP & General Counsel|
|Jonathan M. Craig||Senior EVP-Investor Resources & Marketing|
|Ilaria Outhouse||Senior Real Estate Manager|
|Richard G. Fowler||Senior Vice President-Investor Relations|
|Brian Michael Levitt||Vice Chairman|
Charles SchwabNYSE:SCHW Stock Report
Charles Schwab Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$80.55|
|52 Week High||US$37.29|
|52 Week Low||US$81.24|
|1 Month Change||14.37%|
|3 Month Change||18.56%|
|1 Year Change||107.12%|
|3 Year Change||76.65%|
|5 Year Change||150.23%|
|Change since IPO||25,882.70%|
Recent News & UpdatesSep 29
Charles Schwab: Multiple Growth Drivers Make It An Attractive Long-Term Compounder
Charles Schwab is well-positioned to benefit from continued long-term growth in wealth management assets and greater pricing discipline resulting from industry consolidation. Earnings should grow as the Federal Reserve raises interest rates, providing some hedge against potential market declines due to higher interest rates. After factoring in expected integration synergies from the Ameritrade acquisition, Schwab's valuation is quite reasonable. The stock offers attractive risk-adjusted returns for patient long-term investors.
If You Want Market-Beating Returns, Then Consider Charles Schwab
Charles Schwab has a track record of market-beating returns, and has demonstrated strong growth over the past year. The TD Ameritrade acquisition is bearing fruit for the company and Schwab is expanding into fixed income solutions. I highlight why SCHW remains a Buy, as well as the dividend, valuation, and outlook.
|SCHW||US Capital Markets||US Market|
Return vs Industry: SCHW exceeded the US Capital Markets industry which returned 56.4% over the past year.
Return vs Market: SCHW exceeded the US Market which returned 27.6% over the past year.
Stable Share Price: SCHW is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: SCHW's weekly volatility (4%) has been stable over the past year.
About the Company
The Charles Schwab Corporation, through its subsidiaries, provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company operates in 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; equity compensation plan sponsors full-service recordkeeping for stock plans, stock options, restricted stock, performance shares, and stock appreciation rights; and retail investor, retirement plan, and mutual fund clearing services.
Charles Schwab Fundamentals Summary
|SCHW fundamental statistics|
Earnings & Revenue
|SCHW income statement (TTM)|
|Cost of Revenue||US$513.00m|
Last Reported Earnings
Jun 30, 2021
|Earnings per share (EPS)||2.21|
|Net Profit Margin||26.28%|
How did SCHW perform over the long term?See historical performance and comparison
0.9%Current Dividend Yield
Is Charles Schwab undervalued compared to its fair value and its price relative to the market?
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: SCHW ($80.55) is trading below our estimate of fair value ($80.8)
Significantly Below Fair Value: SCHW is trading below fair value, but not by a significant amount.
Price To Earnings Ratio
PE vs Industry: SCHW is poor value based on its PE Ratio (36.5x) compared to the US Capital Markets industry average (15.6x).
PE vs Market: SCHW is poor value based on its PE Ratio (36.5x) compared to the US market (18.2x).
Price to Earnings Growth Ratio
PEG Ratio: SCHW is poor value based on its PEG Ratio (1.8x)
Price to Book Ratio
PB vs Industry: SCHW is good value based on its PB Ratio (3.2x) compared to the US Capital Markets industry average (61.6x).
How is Charles Schwab forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: SCHW's forecast earnings growth (20.4% per year) is above the savings rate (2%).
Earnings vs Market: SCHW's earnings (20.4% per year) are forecast to grow faster than the US market (15.1% per year).
High Growth Earnings: earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: SCHW's revenue (9% per year) is forecast to grow slower than the US market (9.9% per year).
High Growth Revenue: SCHW's revenue (9% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: SCHW's Return on Equity is forecast to be low in 3 years time (14.6%).
How has Charles Schwab performed over the past 5 years?
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: SCHW has high quality earnings.
Growing Profit Margin: SCHW's current net profit margins (26.3%) are lower than last year (29.8%).
Past Earnings Growth Analysis
Earnings Trend: SCHW's earnings have grown by 15.8% per year over the past 5 years.
Accelerating Growth: SCHW's earnings growth over the past year (34.9%) exceeds its 5-year average (15.8% per year).
Earnings vs Industry: SCHW earnings growth over the past year (34.9%) underperformed the Capital Markets industry 69.1%.
Return on Equity
High ROE: SCHW's Return on Equity (8%) is considered low.
How is Charles Schwab's financial position?
Financial Position Analysis
Short Term Liabilities: SCHW's short term assets ($184.8B) do not cover its short term liabilities ($497.8B).
Long Term Liabilities: SCHW's short term assets ($184.8B) exceed its long term liabilities ($19.2B).
Debt to Equity History and Analysis
Debt Level: SCHW's debt to equity ratio (56.8%) is considered high.
Reducing Debt: SCHW's debt to equity ratio has reduced from 68.3% to 56.8% over the past 5 years.
Debt Coverage: SCHW's debt is well covered by operating cash flow (24%).
Interest Coverage: Insufficient data to determine if SCHW's interest payments on its debt are well covered by EBIT.
What is Charles Schwab current dividend yield, its reliability and sustainability?
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: SCHW's dividend (0.89%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.29%).
High Dividend: SCHW's dividend (0.89%) is low compared to the top 25% of dividend payers in the US market (3.49%).
Stability and Growth of Payments
Stable Dividend: SCHW's dividends per share have been stable in the past 10 years.
Growing Dividend: SCHW's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonably low payout ratio (29.8%), SCHW's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: SCHW's dividends in 3 years are forecast to be well covered by earnings (21.4% payout ratio).
How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Mr. Walter William Bettinger II also known as Walt, has served as President and Chief Executive Officer and Director of The Charles Schwab Corporation since 2008. He also serves as a Member of the Board of...
CEO Compensation Analysis
Compensation vs Market: Walt's total compensation ($USD15.96M) is above average for companies of similar size in the US market ($USD11.26M).
Compensation vs Earnings: Walt's compensation has been consistent with company performance over the past year.
Experienced Management: SCHW's management team is considered experienced (4 years average tenure).
Experienced Board: SCHW's board of directors are considered experienced (8.9 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: SCHW insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
The Charles Schwab Corporation's employee growth, exchange listings and data sources
- Name: The Charles Schwab Corporation
- Ticker: SCHW
- Exchange: NYSE
- Founded: 1971
- Industry: Investment Banking and Brokerage
- Sector: Diversified Financials
- Market Cap: US$152.079b
- Shares outstanding: 1.89b
- Website: https://www.schwab.com
Number of Employees
- The Charles Schwab Corporation
- 3000 Schwab Way
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2021/10/18 22:51|
|End of Day Share Price||2021/10/18 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.
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Charles Schwab Corp (NYSE:SCHW)
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Charles Schwab Review
Charles Schwab continues to be one of the leading online brokerage platforms. The company has been at the forefront of the industry’s move to commission free stock and ETF trading and completed two large acquisitions last year, with TD Ameritrade being most notable. Schwab has brought on an additional 15.8 million customers in the past year, so it is not a niche player in the industry. Schwab has customers spanning the entire range of investor types, from novice to very sophisticated.
As such, Schwab has a variety of platforms available to meet the diverse needs of its customers. Schwab brokerage platforms include a browser-based platform with schwab.com, a sophisticated and highly customizable workstation, and mobile offerings. However, customers trading exclusively in options or actively trading on margin, as well as those wishing to trade FX, crypto currencies, or futures may find better options elsewhere.
We’ll take a deeper look at Schwab as an online broker to help you determine whether it is the right broker for your portfolio needs. We've also reviewed the Charles Schwab Intelligent Portfolios robo-advisor service separately.
- Schwab offers tools and product offerings for all investors and traders
- The broker enjoys strong trade execution and provides excellent screeners for stocks, ETFs, and mutual funds.
- Schwab offers the wide breadth of news, research, calculators, and education that is expected from large, established online brokers.
- Schwab offers a broad mix of products and tools, but limited offerings in cryptocurrency, and no forex trading
- Customers have to actively opt in for returns on uninvested cash.
- Schwab’s acquisition of TD Ameritrade’s online brokerage will combine another deep tool set and eventually give traders access to the trading engine thinkorswim.
Who Charles Schwab Is For
Charles Schwab is a full service broker with more than $6.6 trillion in client assets on its platform. The company’s growth through acquisition means TD Ameritrade’s thinkorswim trading engine will eventually be available to Schwab’s customers. The TD Ameritrade trader-focused platform will be joining Schwabs StreetSmart online trading platform that already meets the needs of less intense investors. The wide range of financial products offered by Schwab is similarly sufficient for the average investor, but may not be the best choice for active options traders or those who want trading access to forex (FX), crypto currency, and futures markets.
Multiple platforms to meet needs of diverse customer base
Free stock and ETF trading
Full service with live customer support, news, research, stock/ETF screeners, educational tools
Ability to add external accounts to the platform for a more complete financial picture
Robo-advisory services, and a physical branch network
Still no automated cash sweep to a money market account.
Charges for option trading may be prohibitive for active options traders–especially those using multiple leg strategies
Crypto currency trading is limited to Bitcoin futures, there is no FX trading, and futures require a separate platform
Margin rates are higher than some competitors
- Schwab, with very deep resources and a commitment to multiple customer types, is an excellent choice for most investors. The broker also has multiple options for traders to access their account. These include a web-based interface, a mobile app, and a desktop application providing higher levels of customization and more sophisticated trading, charting, and analysis tools.
- Stocks and ETFs can be traded for free at Schwab, and they continue to provide improved price execution on more than 90% of trades.
- Schwab offers excellent customer service with live support via phone or chat, as well as all the information and tools the majority of people would need. In addition to account and position tracking and a full suite of calculators and reports, Schwab customers have free access to news, research, stock screeners and charting, as well as educational support and live content offerings during the day and through its retail branch network.
- Schwab allows its customers to see a full picture of their finances by allowing them to see all their assets in one place on Schwab. Assets held outside of Schwab can be shown through a free aggregation service that allows customers to enroll investment and bank accounts, plus credit cards, loans, mortgages, and real estate from more than 15,000 financial institutions.
- Schwabh’s robo advising service, Intelligent Portfolio, is free for all accounts with at least $5k in assets, and there are no fees or commissions. Schwab’s Intelligent Portfolio Premium offering is available for accounts with at least $25k, and has a one-time planning fee and a monthly advisory fee.
- Schwab continues its practice of sweeping excess cash balances to banks, even though they offer lower interest rates than money market funds. Customers need to act proactively if they want to sweep excess cash into higher yielding money market funds at Schwab.
- Options traders utilizing spreads and other multi-leg strategies such as butterflies and condors may want to look for more competitive rates elsewhere. At Schwab these traders pay the $0.65 per contract commission on each leg. While both the workstation and mobile app accept four leg options strategies, only the workstation provides more sophisticated options analysis tools.
- Schwab’s foreign exchange and crypto currency offerings are weak or non-existent. Schwab only offers futures/options on futures trading in Bitcoin through futures/options contracts at CME Group, and they only exchange foreign exchange for foreign stock purchases (for a fee). While Schwab does offer futures trading, it requires a separate platform that active futures traders may not like.
- As of March 23, 2020, Schwab’s base rate was 6.5% for balances above $500,000 with effective rates between 6.58 and 8.33 percent. Those trading on margin may prefer lower rates available elsewhere.
Like all the online brokers, Charles Schwab struggles to contain all the features and platforms it has aimed at different types of investors. Overall, site navigation across Schwab’s multiple platforms is largely intuitive and the account setup process only takes ten minutes online. The platforms include:
- The www.schwab.com website.
- StreetSmart Edge, a desktop workstation that is highly customizable.
- The Charles Schwab mobile application.
- A less-used mobile app called StreetSmart Mobile
- The StreetSmart Central platform that Schwab has streamlined for investors who are trading futures and options.
The good news is that the overview of the platforms is more complicated than actually using them. Schwab does a nice job of allowing its customers to see all of their assets on its site, even assets outside of Schwab’s platform by providing a free aggregation.
Checking balances, checking positions, and obtaining position-specific research can all be done with a simple click. Choosing one of your portfolio holdings or entering a symbol provides current news for that security as well as other information including charts, ratings, earnings, financial statements, peers, ratios, dividends, and research reports. So, all the information is right at your fingertips in an intuitive way across platforms. Calendars showing earnings and economic releases, with expectations and actuals, is available on the website, and the Edge workstation links to that web page. The mobile platform doesn’t have this level of robust information as easily available, which is to be expected with its position entry and monitoring focus.
All platforms have real-time data streams. Edge and the website have drawing tools available for charts, but the web version is limited compared to the downloadable platform. Trades can be entered from a chart in Edge by clicking a trade button in the corner of the chart that launches an order entry window. There are no drawing capabilities for charts on mobile. Multiple orders can be staged on the website and Edge, but not through the mobile app.
StreetSmart Edge offers impressive customization options, including what information you want in the top account balances line, the ability to save specific stock or ETF searches, and customized order tickets. Preferences and stock/ETF/mutual fund screens can also be saved on the website. StreetSmart Edge is the only Schwab platform that shows profit and probability graphs for options strategies. Both StreetSmart Edge and the mobile platform allow for trading four leg options strategies such as butterflies and condors using nice dropdowns that allow the user to choose the strategy where an order ticket is created to match the chosen options strategy (vertical, calendar, ratio spreads, butterfly/condor, etc.).
The website only allows options trading in basic and spread positions consisting of two legs. StreetSmart Edge is also the only platform option for contingent and conditional orders. The website and mobile would not allow entering a limit order with a contingency that, upon execution of the limit order, a one-cancels-other (OCO) order is created to add both a stop loss and profit taking order against the new position.
Mobile Trade Experience
The mobile app works well, but has some obvious limitations for serious traders. This includes not being able to enter contingent orders and limited charting ability. That said, the basic actions that the average investor looks for like obtaining balances, getting news and research on securities, and entering trades were easy and intuitive. The mobile app provides a chart, the Schwab research rating, a quote summary, news, information such as earnings (and next earnings announcement), and market capitalization and margin requirements for individual securities. An easy dropdown menu for options orders makes setting up a spread or four leg option strategy easy, but there is no profit graphing or similar analytics to what is available on the workstation.
The mobile app defaults to the summary view (brokerage and futures totals) and you can either click on an account or click positions from the menu at the top left. The “Markets” page on the mobile app contains a good snapshot of the markets, sectors, and also a listing of breaking news along with Schwab’s own market updates. Stock specific news is available when bringing up an individual stock or ETF, and news can be filtered. Traders and active investors will likely default to the StreetSmart Edge platform, but less demanding investors can reasonably invest and monitor portfolio positions solely through the mobile app.
Range of Offerings
Charles Schwab has a very wide range of securities available on its platform and the asset classes most investors expect are all here. Schwab also offers fractional shares, allowing investors with less capital to get exposure to stocks with a high price per share. On the downside, Schwab’s only cryptocurrency offering is Bitcoin futures, so active traders in the cryptocurrency market will want to look elsewhere. While Schwab has futures trading, and Fidelity does not, it requires the use of a separate platform (the less-used StreetSmart Mobile or the web-based StreetSmart Central), so it could be cumbersome for active futures traders. Schwab also does not offer foreign exchange trading, although they do provide fee-based foreign exchange services related to international stock purchases.
- Stocks long and short (2,864 stocks are currently on Schwab’s Easy To Borrow list for short sales)
- OTCBB (Penny stocks)
- Mutual funds (no-load–9,860 funds, no transaction fee–4,220 funds)
- Bonds (Corporate–18,000 unique offerings; Municipal–nearly 70,000 unique offerings; Treasury–nearly 400 unique offerings, CDs–nearly 20,000 unique offerings; International–access to foreign bonds publicly offered and sold in the US, exempt supranational, and foreign bonds offered and sold overseas under Regulation S.)
- Futures options
- Simple and multi-leg options up to 4 legs (spreads, butterflies, condors) (Edge and Mobile, not website, where limit is two option legs)
- Robo-advisory/Intelligent Portfolio Builder (managed via the website, but account is viewable on mobile)
- Full service investment advisor services and a wide retail/physical presence
- Fractional Shares (for as little as $5)
- International (Schwab Global Accounts can purchase stocks in 12 non-U.S. markets in eight currencies AUD; CAD; EUR; GBP; HKD; JPY; NOK; USD. Fees apply on foreign exchange transactions for purchasing foreign stocks)
Charles Schwab offers all basic order types, including market, limit, stop, and trailing stops, as well as market if touched (MIT), market on close (MOC), market on open (MOO) type orders. All or none (AON), fill or kill (FOK), and immediate or cancel (IOC) orders are also available, while tax lot selection for closing positions can be done at the individual lot level or by using a rule such as first in, first out (FIFO) or last in, first out (LIFO) at the account level. StreetSmart Edge allows traders to enter more sophisticated orders, such as a limit order with a OCO contingent order such a stop loss and a profit taking level.
Charles Schwab utilizes a proprietary wheel-based router for order management purposes, such as handling exchange outages, performing real-time execution quality reviews and handling volatile markets. Most orders in stocks and multiple-exchange listed options are routed to third-party wholesalers, balancing execution quality in terms of increased price improvement and improved execution quality statistics with its own cost savings. Quarterly information regarding execution quality is published on Schwab's website.
There is no trading simulator available to Schwab clients, nor is there the capability to automate and backtest a trading system.
Schwab’s costs are reasonable considering the wide offering to customers. There is no cost to trade equity and ETFs, and you get streaming quotes, good functionality, tools, calculators, and educational resources, as well as news and research with the package. The free aggregation service is also appealing for those wishing to see their entire financial picture in one place. While options charges are not excessive at $0.65 per trade, active options traders, especially those utilizing multiple leg options strategies, may find a better deal elsewhere. Similarly, those trading on margin may prefer lower rates available elsewhere.
- No commissions for online trades in equities, ETFs, or OTCBB trades
- Options are $0.65 per round trip, per contract. There are no per-leg fees on options
- Trade 20 contracts, round trip. Commission is $13.00 ($0.65 x 20)
- Sell covered call on 500 shares: 5 options contracts, commission $3.25 ($0.65 x 5)
- Fixed Income: no commission for T-Bills, Notes, Bonds, TIPS, and new CD issues. Secondary market transactions for corporate, municipal, agency, and zero coupon bonds and CDs is $1 per bond, with a $10 minimum and $250 maximum commission.
- Margin rates are based on account size, by breakpoint: Under $25K 8.325%; $50K 7.825%; $100K 6.875%; $250K 6.825%; $500K 6.575%.
- Mutual Funds: No commission on Schwab’s Mutual Fund OneSource platform funds when done online; up to $49.50 for other mutual funds
- International stocks: currency transaction fees apply based on amount converted, with rate based on transaction size tiers; 100 bps if <$100K; then 75 bps to $250K; 50 bps to $500K; 30 bps to $1 million; and 20 bps if >$1 million
- Account Size and Fees:
- Basic Accounts: No minimum account size for basic accounts.
- Schwab Intelligent Portfolios:
- Basic Platform: $5,000 account minimum, no advisory fee or commissions
- Premium Platform: $25,000 account minimum; one time planning fee of $300; and monthly advisory fee of $30
- Schwab Private Client Accounts: $1 million account minimum. Fees start at 0.80% and move lower based on asset levels
- Futures: $1.50 per contract
- $25 additional fee per trade if placed with a live broker (no fees for broker assisted futures trades)
- No maintenance, minimum account, inactivity, or software access fees
- No deposit, withdrawal, account closing (other than ACAT cost), check, or direct deposit fees. There is a $50 full transfer fee and a $25 partial transfer fee.
- Wire fees are $15 per transfer for online requests; $25 per transfer for phone/paper requests
How This Broker Makes Money From You and for You
The race to zero fees has increased competitive pressure in the asset management industry and changed the business model for many online brokers. However, $0 commissions does not mean that everything is free, as brokers can still make money from you (and for you) in less obvious ways.
- Price Improvement: Charles Schwab uses proprietary technology to route orders and the broker rates highly for obtaining price improvement on customer orders. Schwab’s website indicates their first priority on routing orders is to obtain good execution for clients, and they appear to largely do this. Schwab reports achieving price improvement on 93.7% of orders, an average of $14.48 in savings per order, and average execution speed of 0.08 seconds.
- Payment From Order Flow (PFOF): Commission free trading in stocks and ETFs, streaming quotes and other client amenities has Schwab obtaining revenue elsewhere, and they do receive PFOF. Schwab’s PFOF revenue increased 78% from 2019 to 2020, and this is modest compared with increases in excess of 100% for other brokers. Aggregate PFOF for all brokers increased to $2.5B in 2020 compared to $895M in 2019, driven by increases in retail trading and overall volume during the pandemic.
- Portfolio Margining: Qualifying accounts also can benefit from portfolio margining that lowers margin cost based on overall risk in a portfolio, and a stock loan program where Schwab shares revenue with clients that allow shares in their account to be lent out. Margin rates are not especially competitive.
- Interest on Cash Balances: Schwab also generates significant revenue from excess cash in accounts that are by default put into bank accounts instead of higher paying money market funds. While these bank deposits are insured for more than federal protection levels through Lloyds of London insurance policies Schwab takes out, they pay lower rates than money market funds that other brokers automatically put customer cash into. Schwab customers need to be proactive if they want their excess cash put into higher yielding money market funds.
Account and Research Amenities
Schwab, as a leading brokerage firm catering to a broad customer base, has a comprehensive set of amenities to support its clients
Schwab has sophisticated screeners with pre-built screening reports, as well as the ability to create customized stock screens by price, company performance, valuation, financial strength, and even technical indicators. There are 11 built-in screens for Stocks/Equities on the website, and StreetSmart Edge has 30 pre-built stock screening reports.
There is also an Idea Hub on StreetSmart Edge that helps customers scan for options trading ideas, and there is the ability to build and save customized security screens in Edge and the website. The mutual fund and ETF screeners can also filter for socially responsible investments (SRI), and Edge also has another screening tool built into the workstation, rather than a pop-up similar to the website.
ETF and Mutual Fund Screeners
Schwab’s website has 16 built-in ETF screens, and 11 screens for mutual funds. StreetSmart Edge also has the ETF screener, but the mutual fund screener needs to be accessed from the website. StreetSmart Edge has its own screener that has a number of predefined screens, and the ability to customize screens based on user-determined criteria, but some of the screens pop up a screen of the same functionality of the web pages. Schwab’s screeners can also look for ETFs and Mutual funds that are socially conscious. Schwab also has a dedicated area for its own mutual funds.
The options page has tabs for trading, viewing option chains, a set of screeners that includes pre-defined screens for stocks that meet user-defined criteria such as high P/E ratios, volatility, put-call ratio, and others. The user can also set up their own screen that can be saved. There are also option trade assessors, and a strategy builder, and even a strategy finder that suggests a trade based on what the customer thinks is going to happen, such as higher or lower prices, timeframe, volatility expectations and other criteria. However, options strategies are limited to basic spreads on the website. There is also an Idea Hub on StreetSmart Edge that helps identify options trading opportunities.
Fixed Income Screeners
The fixed income screener allows the user to select a bond type, such as corporate, municipal, treasury, agency and use secondary menus to look at industry or sector, or states for municipals. Maturity dates, coupon, price, and ratings are available filtering options. Schwab also has a CD and treasury ladder builder.
Tools and Calculators
Schwab customers also have access to a very wide variety of calculators and tools for everything from margin, portfolio analysis and allocation, retirement and income guidance, tax efficiency, and options pricing probabilities to name a few. Similarly, there are multiple reports available and easy to access, such as for tax reporting.
Trading Idea Generator
An Idea Hub provides ideas in different areas of the market utilizing predefined screens that include open interest, volatility, volume, earnings calendar, and even provide good candidates for covered calls strategies. Schwab also has an options strategy finder based on the users expectations for a security related to price direction, timing, volatility, risk, and other factors.
News and Research
All the brokerage platforms provide Schwab research, as well as multiple other sources, such as Morningstar and Reuter’s Analyst Opinion Information that shows a survey of analyst ratings for a stock. Similarly, multiple news offerings are provided in addition to Schwab’s deep offerings, and that information can be filtered and various sources included or not. Associated Press, Business Wire, GlobeNewswire, and briefing.com are among the offerings. Other news and research is also available for a fee, and many of these services have extended trial periods available.
Charting features on the website and mobile are limited, with considerably more charting functionality available through StreetSmart Edge, including the ability to hit a trade button right on the chart to open an order window with order entry that provides assistance and analysis for options strategies. StreetSmart Edge also provides charting on Recognia, and allows journaling of trading activities with notes and snapshots of charts. Schwab does not, however, offer paper trading or backtesting of strategies.
Dividend Reinvestment Program
Schwab customers can specify dividend reinvestment for dividend-paying stocks.
Excess cash in Schwab accounts are put into bank accounts instead of higher paying money market funds. These accounts pay lower rates than money market funds that other brokers automatically put customer cash into. Schwab customers need to be proactive if they want their excess cash put into higher yielding money market funds.
SRI/ESG Research Amenities
Schwab supports investors interested in socially responsible investing. Schwab’s robust screeners for mutual funds and ETFs offer an SRI filter option, so investors can set up highly customizable searches that limit results to socially responsible options. My quick filters for US equity mutual funds and ETFs that meet the SGI criteria returned more than 120 options in each category. Schwab also has separately managed accounts that focus on socially responsible investing.
Schwab has all the portfolio analysis tools one would expect, including calculators of all kinds, including margin, portfolio mix, retirement and income guidance, tax efficiency, life events, options pricing and probabilities. Real-time information is available for portfolio balances, margin and buying power calculations, and most analysis, and there are tools for portfolio rebalancing, benchmarking, internal rate of return, and tax impact analysis and other tax accounting tools. There is also real-time information for short and long term capital gains, gains/losses net of deposits and withdrawals, while realized gains and losses use historical pricing based on transaction price and provide the date and price information on the original transaction for wash sales.
The ability to aggregate financial information from other institutions, as previously outlined, is a nice feature allowing customers to see a fuller picture of their financial condition. Trading journals are also available, although strategy backtesting is not currently offered.
As a company looking to provide services across the Schwab also provides a great deal of information and content for investors and traders, including an average of five hours of daily live programming, discussing trading strategies, wealth management, economic analysis, and a number of articles and event specific investing topics such as investing for retirement and college. Schwab provided more than 1,000 webcasts in 2020, and their branch network held over 3,400 branch events in 2020.
There are many articles and plenty of helpful content about specific products, investing topics, and life goals such as investing for retirement and college.
- Customer service is available to potential and existing customers by phone or chat with a live person 24/7. The average hold time in 2020 was 102 seconds.
- You can also speak with a broker, with a surcharge for trades placed through the broker.
- The chat feature and customer service by phone provided helpful and timely support.
- The website has a most commonly asked questions area broken out by topic that was easy to navigate and had a lot of information.
Security and Reliability
- Schwab’s platforms are secured according to industry standards.
- Two-factor authentication available on all platforms, as well as fingerprint or facial biometric entry on the mobile app.
- Customers can choose between a physical token or a soft token delivered via mobile app for two factor authentication.
- Schwab’s systems are very reliable, having had platform performance in excess of 99.9%.
- Schwab also provides a security guarantee, and there have been no data breaches publicly disclosed on Schwab’s website.
Pricing structures, fees, and information outlining leverage and margin trading were all well displayed and disclosed on Schwab’s website. Schwab breaks down these costs by intuitive sections that include trading fees and commissions; account fees and minimums; investment management fees and minimums; and money management fees. The leverage and margin sections included video and text information outlining the benefits and risks associated with leveraged trading, and provided an explanation of a margin call. Beyond the fee schedule, Schwab also provides content related to their services, fees, and obligations, as well as a section explaining mutual fund fees.
Schwab provides detailed information about their order routing process, including their focus on putting the customer first and getting the best execution through their proprietary order routing system. Schwab also provides statistics on price improvement and average savings per order for customers, but does not disclose that they receive payment for order flow in this same section of the website. Schwab’s position is that their execution efforts benefit customers, but they are reluctant to disclose their payment for order flow, even though that revenue is what helps Schwab provide customers with commission free trading and the many other amenities it offers.
Schwab has long been one of the largest operators in the online brokerage space, and this position has been further bolstered through the recent acquisition of TD Ameritrade. Its large size and economy of scale allows Schwab to provide its diverse client base with a wide range of products, services, education, and support for nearly all investor types, especially relating to equities, mutual funds, ETFs, and fixed income. Schwab offers free trading and streaming quotes for stocks and ETFs, and web, desktop, and mobile applications that are mostly intuitive and work smoothly. Considering it is such a large website and there is so much content available, Schwab does pretty well with its website navigation and corresponding menus; these menus contain a lot of choices, but they were set up by category and mostly intuitive.
While Schwab’s breadth of services, low costs for equity and ETF trading, and full suite of services is a good choice for the majority of investors and traders, Schwab may not be the best choice for some smaller subsets of the investing/trading universe. This includes high volume options traders because of the $0.65 commission per leg, futures traders because of the need for a separate platform, those trading on margin because lower rates are available elsewhere, and people looking for opportunities to trade currencies or cryptocurrencies not currently available at Schwab.
Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on its platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting thousands of data points that we weighed into our star-scoring system.
In addition, every broker we surveyed was required to fill out an extensive survey about all aspects of its platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of its platforms at our offices.
Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.
Charles Schwab Corp SCHW:NYSE
- Day High81.63
- Day Low80.23
- Prev Close80.55
- 52 Week High81.63
- 52 Week High Date10/19/21
- 52 Week Low37.29
- 52 Week Low Date10/28/20
- Market Cap153.948B
- Shares Out1.888B
- 10 Day Average Volume5.79M
- Dividend Yield0.88%
- YTD % Change53.73
- EPS (TTM)2.62
- P/E (TTM)31.06
- Fwd P/E (NTM)24.77
- EBITDA (TTM)7.602B
- ROE (TTM)11.42%
- Revenue (TTM)16.276B
- Gross Margin (TTM)97.48%
- Net Margin (TTM)28.15%
- Debt To Equity (MRQ)680.32%
- Earnings Date01/17/2022
- Ex Div Date08/12/2021
- Div Amount0.18
- Split Date-
- Split Factor-
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Charles Schwab Corp.
Stocks: Real-time U.S. stock quotes reflect trades reported through Nasdaq only; comprehensive quotes and volume reflect trading in all markets and are delayed at least 15 minutes. International stock quotes are delayed as per exchange requirements. Fundamental company data and analyst estimates provided by FactSet. Copyright 2019© FactSet Research Systems Inc. All rights reserved. Source: FactSet
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Commodities & Futures: Futures prices are delayed at least 10 minutes as per exchange requirements. Change value during the period between open outcry settle and the commencement of the next day's trading is calculated as the difference between the last trade and the prior day's settle. Change value during other periods is calculated as the difference between the last trade and the most recent settle. Source: FactSet
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Mutual Funds & ETFs: All of the mutual fund and ETF information contained in this display, with the exception of the current price and price history, was supplied by Lipper, A Refinitiv Company, subject to the following: Copyright 2019© Refinitiv. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
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The Charles Schwab Corporation is an American multinational financial services company. It offers banking, commercial banking, an electronic trading platform, and wealth management advisory services to both retail and institutional clients. It has over 360 branches, primarily in financial centers in the United States and the United Kingdom. It is the 13th largest banking institution in the United States with over US$6.6 trillion in client assets. It is the third largest asset manager in the world, behind BlackRock and Vanguard. It had 29.0 million active brokerage accounts, 2.1 million corporate retirement plan participants, 1.5 million banking accounts, and $7.57 trillion in client assets as of July 16, 2021. It was founded in San Francisco, California and is headquartered in Westlake, Texas. Founded as Charles Schwab & Co. in 1971 by its namesake Charles R. Schwab, the company capitalized on the financial deregulation of the 1970s to pioneer discount sales of equity securities. After a flagship opening in Sacramento, the bank expanded into Seattle before the 1980s economic expansion financed the bank's investments in technology, automation, and digital record keeping. Wikipedia