The Charles Schwab Corporation $SCHW Shares Acquired by Generation Investment Management LLP

Key Points

• Generation Investment Management LLP has increased its holdings in The Charles Schwab Corporation to 14,327,559 shares, representing a 6.2% lift, making it the fund's third largest position.
• The board of Charles Schwab has authorized a $20 billion stock buyback program, allowing the company to repurchase up to 11.6% of its shares, indicating a belief that the stock is undervalued.
• Charles Schwab reported strong financial results for its latest quarter, with an Earnings Per Share (EPS) of $1.14, exceeding estimates, alongside a revenue of $5.85 billion that was also above expectations.

Generation Investment Management LLP boosted its position in shares of The Charles Schwab Corporation (NYSE:SCHW - Free Report) by 6.2% during the 1st quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The firm owned 14,327,559 shares of the financial services provider's stock after purchasing an additional 833,602 shares during the quarter. Charles Schwab comprises about 6.8% of Generation Investment Management LLP's portfolio, making the stock its 3rd biggest position. Generation Investment Management LLP owned 0.79% of Charles Schwab worth $1,121,561,000 at the end of the most recent reporting period.

Several other institutional investors also recently bought and sold shares of the company. Vanguard Group Inc. increased its holdings in shares of Charles Schwab by 15.4% in the 1st quarter. Vanguard Group Inc. now owns 148,395,252 shares of the financial services provider's stock valued at $11,616,380,000 after acquiring an additional 19,817,022 shares during the period. Price T Rowe Associates Inc. MD increased its holdings in shares of Charles Schwab by 12.3% in the 1st quarter. Price T Rowe Associates Inc. MD now owns 82,048,984 shares of the financial services provider's stock valued at $6,422,795,000 after acquiring an additional 8,954,248 shares during the period. Northern Trust Corp increased its holdings in shares of Charles Schwab by 10.8% in the 1st quarter. Northern Trust Corp now owns 17,440,301 shares of the financial services provider's stock valued at $1,365,227,000 after acquiring an additional 1,700,384 shares during the period. Invesco Ltd. increased its holdings in shares of Charles Schwab by 5.0% in the 1st quarter. Invesco Ltd. now owns 15,586,450 shares of the financial services provider's stock valued at $1,220,107,000 after acquiring an additional 743,906 shares during the period. Finally, Wellington Management Group LLP increased its holdings in shares of Charles Schwab by 595.7% in the 1st quarter. Wellington Management Group LLP now owns 15,488,777 shares of the financial services provider's stock valued at $1,212,461,000 after acquiring an additional 13,262,309 shares during the period. 84.38% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

SCHW has been the topic of a number of analyst reports. William Blair downgraded Charles Schwab from a "strong-buy" rating to a "hold" rating in a report on Thursday, July 3rd. Bank of America lifted their price target on Charles Schwab from $83.00 to $84.00 and gave the company an "underperform" rating in a report on Monday, July 21st. Citigroup lifted their price target on Charles Schwab from $105.00 to $110.00 and gave the company a "buy" rating in a report on Monday, July 21st. Piper Sandler lifted their price target on Charles Schwab from $80.00 to $92.00 and gave the company a "neutral" rating in a report on Tuesday, July 15th. Finally, Barclays boosted their target price on Charles Schwab from $106.00 to $113.00 and gave the stock an "overweight" rating in a research note on Friday, July 18th. Sixteen research analysts have rated the stock with a Buy rating, three have given a Hold rating and two have given a Sell rating to the company's stock. According to data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $99.60.

Charles Schwab Stock Up 1.5%

SCHW stock traded up $1.43 on Thursday, hitting $97.65. 7,501,007 shares of the company's stock were exchanged, compared to its average volume of 7,538,955. The firm has a 50 day moving average price of $95.15 and a two-hundred day moving average price of $86.25. The Charles Schwab Corporation has a 12-month low of $61.16 and a 12-month high of $99.59. The company has a debt-to-equity ratio of 0.47, a quick ratio of 0.55 and a current ratio of 0.55. The stock has a market cap of $177.26 billion, a P/E ratio of 26.25, a price-to-earnings-growth ratio of 0.95 and a beta of 0.96.

Charles Schwab (NYSE:SCHW - Get Free Report) last issued its quarterly earnings results on Friday, July 18th. The financial services provider reported $1.14 EPS for the quarter, topping analysts' consensus estimates of $1.10 by $0.04. Charles Schwab had a return on equity of 19.30% and a net margin of 33.68%.The company had revenue of $5.85 billion during the quarter, compared to analysts' expectations of $5.64 billion. During the same quarter in the previous year, the firm posted $0.73 EPS. The firm's revenue was up 24.8% compared to the same quarter last year. As a group, equities research analysts expect that The Charles Schwab Corporation will post 4.22 EPS for the current fiscal year.

Charles Schwab Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, August 22nd. Shareholders of record on Friday, August 8th were given a dividend of $0.27 per share. The ex-dividend date of this dividend was Friday, August 8th. This represents a $1.08 dividend on an annualized basis and a yield of 1.1%. Charles Schwab's payout ratio is currently 29.03%.

Charles Schwab declared that its Board of Directors has initiated a stock buyback plan on Thursday, July 24th that authorizes the company to repurchase $20.00 billion in shares. This repurchase authorization authorizes the financial services provider to buy up to 11.6% of its shares through open market purchases. Shares repurchase plans are often an indication that the company's leadership believes its stock is undervalued.

Insider Activity at Charles Schwab

In other Charles Schwab news, Chairman Walter W. Bettinger sold 173,876 shares of Charles Schwab stock in a transaction dated Tuesday, July 29th. The stock was sold at an average price of $98.84, for a total transaction of $17,185,903.84. Following the completion of the sale, the chairman owned 590,734 shares of the company's stock, valued at approximately $58,388,148.56. The trade was a 22.74% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, General Counsel Peter J. Morgan III sold 50,016 shares of Charles Schwab stock in a transaction dated Wednesday, August 27th. The stock was sold at an average price of $97.00, for a total value of $4,851,552.00. The disclosure for this sale can be found here. Insiders have sold a total of 298,214 shares of company stock worth $29,022,580 in the last quarter. 6.30% of the stock is owned by insiders.

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.