Charles Schwab (NYSE:SCHW) Issues Quarterly Earnings Results

Key Points

• Charles Schwab reported earnings of $1.31 per share, exceeding estimates by $0.07, and generated $6.14 billion in revenue for the quarter, significantly higher than the anticipated $5.93 billion.
• The company announced a stock repurchase plan authorizing the buyback of up to $20 billion in shares, indicating confidence in its stock valuation.
• Insider selling was reported, with Chairman Walter W. Bettinger offloading 173,876 shares, reflecting a 22.74% decrease in ownership, amidst broader institutional interest in the company stock.

Charles Schwab (NYSE:SCHW - Get Free Report) posted its earnings results on Thursday. The financial services provider reported $1.31 earnings per share for the quarter, beating the consensus estimate of $1.25 by $0.06, Zacks reports. Charles Schwab had a net margin of 33.68% and a return on equity of 19.30%. The firm had revenue of $6.14 billion during the quarter, compared to the consensus estimate of $5.93 billion. During the same period last year, the firm posted $0.71 EPS. The firm's revenue for the quarter was up 26.6% on a year-over-year basis.

Charles Schwab Stock Performance

Shares of NYSE SCHW traded up $1.51 during midday trading on Thursday, reaching $95.84. 6,064,628 shares of the company traded hands, compared to its average volume of 9,859,802. Charles Schwab has a 52 week low of $65.88 and a 52 week high of $99.59. The stock has a 50-day moving average price of $94.79 and a 200 day moving average price of $89.37. The company has a debt-to-equity ratio of 0.47, a current ratio of 0.55 and a quick ratio of 0.55. The company has a market cap of $173.96 billion, a price-to-earnings ratio of 25.76, a PEG ratio of 0.89 and a beta of 0.97.

Charles Schwab Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, August 22nd. Stockholders of record on Friday, August 8th were given a $0.27 dividend. This represents a $1.08 dividend on an annualized basis and a dividend yield of 1.1%. The ex-dividend date was Friday, August 8th. Charles Schwab's dividend payout ratio (DPR) is presently 29.03%.

Charles Schwab declared that its board has initiated a share buyback program on Thursday, July 24th that allows the company to repurchase $20.00 billion in outstanding shares. This repurchase authorization allows the financial services provider to repurchase up to 11.6% of its stock through open market purchases. Stock repurchase programs are often an indication that the company's board believes its stock is undervalued.

Insider Buying and Selling

In other news, Chairman Walter W. Bettinger sold 173,876 shares of the company's stock in a transaction that occurred on Tuesday, July 29th. The shares were sold at an average price of $98.84, for a total value of $17,185,903.84. Following the completion of the sale, the chairman directly owned 590,734 shares of the company's stock, valued at approximately $58,388,148.56. This represents a 22.74% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. Also, General Counsel Peter J. Morgan III sold 50,016 shares of the company's stock in a transaction that occurred on Wednesday, August 27th. The stock was sold at an average price of $97.00, for a total transaction of $4,851,552.00. The disclosure for this sale can be found here. In the last quarter, insiders sold 267,128 shares of company stock worth $26,232,077. Company insiders own 6.30% of the company's stock.

Institutional Trading of Charles Schwab

A number of institutional investors have recently made changes to their positions in SCHW. Corient Private Wealth LLC lifted its stake in shares of Charles Schwab by 83.0% in the 2nd quarter. Corient Private Wealth LLC now owns 1,477,391 shares of the financial services provider's stock worth $134,840,000 after acquiring an additional 670,087 shares during the period. Park Presidio Capital LLC grew its stake in shares of Charles Schwab by 166.2% in the 2nd quarter. Park Presidio Capital LLC now owns 968,852 shares of the financial services provider's stock worth $88,398,000 after purchasing an additional 604,887 shares during the last quarter. Teewinot Capital Advisers L.L.C. grew its stake in shares of Charles Schwab by 894.9% in the 2nd quarter. Teewinot Capital Advisers L.L.C. now owns 447,027 shares of the financial services provider's stock worth $40,787,000 after purchasing an additional 402,093 shares during the last quarter. Worldquant Millennium Advisors LLC grew its stake in shares of Charles Schwab by 222.7% in the 2nd quarter. Worldquant Millennium Advisors LLC now owns 421,102 shares of the financial services provider's stock worth $38,421,000 after purchasing an additional 290,595 shares during the last quarter. Finally, Vident Advisory LLC grew its stake in shares of Charles Schwab by 461.0% in the 2nd quarter. Vident Advisory LLC now owns 323,063 shares of the financial services provider's stock worth $29,476,000 after purchasing an additional 265,475 shares during the last quarter. 84.38% of the stock is owned by institutional investors and hedge funds.

Wall Street Analysts Forecast Growth

A number of research firms have weighed in on SCHW. Zacks Research downgraded shares of Charles Schwab from a "strong-buy" rating to a "hold" rating in a research note on Wednesday, September 17th. Raymond James Financial reaffirmed an "outperform" rating and set a $99.00 price target on shares of Charles Schwab in a research note on Friday, July 18th. Keefe, Bruyette & Woods increased their target price on shares of Charles Schwab from $102.00 to $108.00 and gave the stock an "outperform" rating in a research report on Monday, July 21st. William Blair downgraded shares of Charles Schwab from a "strong-buy" rating to a "hold" rating in a research report on Thursday, July 3rd. Finally, Piper Sandler reissued a "neutral" rating on shares of Charles Schwab in a research report on Tuesday. One analyst has rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating, five have assigned a Hold rating and two have given a Sell rating to the company. According to MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $101.85.

Charles Schwab Company Profile

The Charles Schwab Corporation, together with its subsidiaries, operates as a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services in the United States and internationally. The company operates in two segments, Investor Services and Advisor Services.