Charles Schwab (NYSE:SCHW) Sets New 12-Month High After Dividend Announcement

Key Points

• Charles Schwab shares hit a new 52-week high of $98.20 following the announcement of a $0.27 dividend to be paid on August 22nd, translating to an annual yield of 1.11%.
• Analysts have given the stock a Moderate Buy rating, with price targets ranging from $95 to $110; recent upgrades were made by Citigroup and JMP Securities.
• The company's quarterly earnings revealed a 24.8% year-over-year revenue increase, beating estimates with earnings of $1.14 per share.
• Charles Schwab has authorized a $20 billion stock buyback plan, indicating management's belief that shares are undervalued.

The Charles Schwab Corporation (NYSE:SCHW - Get Free Report) shares reached a new 52-week high during trading on Friday after the company announced a dividend. The company traded as high as $98.20 and last traded at $98.13, with a volume of 597986 shares trading hands. The stock had previously closed at $96.50.The newly announced dividend which will be paid on Friday, August 22nd. Investors of record on Friday, August 8th will be given a $0.27 dividend. This represents a $1.08 dividend on an annualized basis and a yield of 1.11%. Charles Schwab's payout ratio is presently 29.03%.

Wall Street Analyst Weigh In

Several brokerages have issued reports on SCHW. Citigroup boosted their price objective on shares of Charles Schwab from $105.00 to $110.00 and gave the company a "buy" rating in a report on Monday. UBS Group upped their price target on shares of Charles Schwab from $95.00 to $96.00 and gave the company a "buy" rating in a research note on Tuesday, April 22nd. Cowen reaffirmed a "buy" rating on shares of Charles Schwab in a research note on Tuesday, May 20th. JMP Securities upped their price target on shares of Charles Schwab from $106.00 to $110.00 and gave the company a "market outperform" rating in a research note on Monday. Finally, Keefe, Bruyette & Woods upped their price target on shares of Charles Schwab from $102.00 to $108.00 and gave the company an "outperform" rating in a research note on Monday. Two research analysts have rated the stock with a sell rating, four have issued a hold rating and sixteen have assigned a buy rating to the company's stock. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $98.65.

Charles Schwab Stock Up 1.2%

The company has a current ratio of 0.53, a quick ratio of 0.53 and a debt-to-equity ratio of 0.53. The stock has a 50-day simple moving average of $90.17 and a 200-day simple moving average of $82.64. The company has a market cap of $177.41 billion, a price-to-earnings ratio of 26.25, a price-to-earnings-growth ratio of 0.91 and a beta of 0.93.

Charles Schwab (NYSE:SCHW - Get Free Report) last posted its quarterly earnings results on Friday, July 18th. The financial services provider reported $1.14 earnings per share for the quarter, beating the consensus estimate of $1.10 by $0.04. Charles Schwab had a return on equity of 19.73% and a net margin of 33.68%. The firm had revenue of $5.85 billion for the quarter, compared to analyst estimates of $5.64 billion. During the same period in the previous year, the firm earned $0.73 earnings per share. Charles Schwab's quarterly revenue was up 24.8% on a year-over-year basis. As a group, analysts predict that The Charles Schwab Corporation will post 4.22 EPS for the current year.

Charles Schwab announced that its Board of Directors has authorized a stock repurchase plan on Thursday, July 24th that allows the company to buyback $20.00 billion in shares. This buyback authorization allows the financial services provider to reacquire up to 11.6% of its stock through open market purchases. Stock buyback plans are generally an indication that the company's leadership believes its shares are undervalued.

Insider Activity

In other news, insider Jonathan S. Beatty sold 2,850 shares of Charles Schwab stock in a transaction on Friday, May 30th. The stock was sold at an average price of $87.57, for a total value of $249,574.50. Following the completion of the sale, the insider directly owned 15,219 shares of the company's stock, valued at approximately $1,332,727.83. This trade represents a 15.77% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, insider Paul V. Woolway sold 3,290 shares of Charles Schwab stock in a transaction on Tuesday, July 1st. The shares were sold at an average price of $90.95, for a total value of $299,225.50. Following the completion of the sale, the insider directly owned 35,864 shares of the company's stock, valued at $3,261,830.80. This trade represents a 8.40% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders have sold 116,313 shares of company stock worth $10,264,091 over the last 90 days. Company insiders own 6.30% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in SCHW. Atwood & Palmer Inc. acquired a new stake in shares of Charles Schwab in the 1st quarter valued at about $25,000. Westside Investment Management Inc. increased its position in shares of Charles Schwab by 75.0% in the first quarter. Westside Investment Management Inc. now owns 350 shares of the financial services provider's stock valued at $27,000 after acquiring an additional 150 shares during the last quarter. RMG Wealth Management LLC acquired a new stake in shares of Charles Schwab in the second quarter valued at about $27,000. CBIZ Investment Advisory Services LLC increased its position in shares of Charles Schwab by 97.9% in the first quarter. CBIZ Investment Advisory Services LLC now owns 386 shares of the financial services provider's stock valued at $30,000 after acquiring an additional 191 shares during the last quarter. Finally, Stone House Investment Management LLC acquired a new stake in shares of Charles Schwab in the first quarter valued at about $31,000. 84.38% of the stock is currently owned by institutional investors.

About Charles Schwab

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.

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