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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
The Charles Schwab Corporation (XNYS:SCHW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SCHW
Name:
THE CHARLES SCHWAB CORPORATION (XNYS:SCHW)
Sector:
2.76B
Industry:
Capital Markets
CEO:
Mr. Walter Bettinger
Total Employees:
35,200
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 19.13% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF THE CHARLES SCHWAB CORPORATION(SCHW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CAPITAL MARKETS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
70.34
One Month Price Target:
$70.76
Six Month Price Target :
$72.85
Likely Price in One Year's Time:
Ticker:
$75.36
Likely Trading Range Today Under (Normal Volatility)
$70.08
Price Upper limit ($) :
$70.72
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$66.57
This week:
$61.9
This month :
$53.47
Other Primary facts
Market Cap:
133.69B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.90B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.13%
-12.33%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$87.84
$79.75
$52.84
$60.93
Medium risk (<10%) entry points
Buy Call
Sell Call
$77.11
Buy Put:
Sell Put:
$75.39
$63.54
$65.29
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SCHW
Sharpe Ratio:
2.90%
Comparison:
SCHW, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -17.04% lower than the industry
& ratio is 27.19% higher than the market/S&P 500 average
Average Returns/Yield of
SCHW
Daily returns:
0.09%
Weekly returns:
0.43%
Monthly returns:
1.72%
Yearly returns:
25.05%
Comparison of returns:
Average annual returns/yield (last 3 years) is -17.83% below industry average
Classification:
SCHW, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.7
Statistical test of Returns:
SCHW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.65%
Weekly Volatility:
5.93%
Monthly Volatility:
11.87%
Yearly Volatility:
41.11%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.72%
Volatility in last five trading days has been -35.27% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.36%
Weekly VaR:
-11.99%
Monthly VaR:
-23.99%
How Much Can the price of
SCHW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-83.09%
This translates to price declining to:
$56.11
This translates to price declining to:
$11.89
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SCHW is a 69.30% riskier investment compared to the market/S&P 500 & is 45.04% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -3.42% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SCHW
Beta in relation to market/S&P 500--1.06
Expected beta in 1 year's time:
0.755
Expected beta in 3 year's time:
1.067
Unlevered (debt free) Beta:
0.789
Beta in relation to Nasdaq (XNAS):
0.801
Beta in relation to all global stocks::
0.84
Beta Comparison & Analysis
Beta of competitors/peers::
0.995
Beta is 6.69% higher than peers
Average Industry Beta:
1.144
Beta is -7.21% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
7.87%
Sustainable growth rate is -65.73% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.102
Alpha is -27.74% below industry average alpha yield
Alpha is 647% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SCHW
Equity cost of capital:
0.104
Equity cost of capital is -5.15% below industry mean WACC
Unlevered (without debt) cost of capital:
7.75%
Before-tax cost of debt:
1.95%
After-tax cost of debt:
1.54%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.54%
WACC is 3.09% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$9.74
Revenue growth rate per share of (3Y):
2.77
Annual revenue growth rate is -1.79% below industry average
EPS:
$2.76
Expected Annual growth rate of EPS (3Y):
1.71%
Expected future EPS growth rate is -96.75% lower than the Capital Markets industry
Free cash flow (FCF) per share:
$4.64
Balance sheet equity growth per share: 118.39%
Equity growth rate per share is 18.33% higher than the industry
Debt per share
$11.53
EBITDA per share
$4.89
Valuation Analysis Today of
SCHW
P/E Ratio:
23.14
P/E Ratio of Competitors/Peers:
12.26
P/E ratio is 88.77% higher than main peers & is 15.73% higher than the industry
Stock price/value with industry average P/E ratio: $55.18
SCHW is 27.47% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $20.44
Present value of the expected future dividends only: $8.86
P/S (Price to Sales ratio):
7.22
Price to sales ratio is 68.54% above the industry mean
P/B (Price to book value ratio):
2.77
Price to free cash flow: 15.17
Price to free cash flow ratio is 451.63% higher than the industry
Net income growth rate (3Y):
57.49%
Net income growth rate is -147.57% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 8.82%
Dividend yeild: 1.08%
Previous Dividend: $0.20
Previous adjusted dividend: $0.20
Previous Dividend: $0.76
Expected next dividend best case: $0.21
Expected next dividend worst case: $0.19
Average dividend payment (long-term): $0.18
Average dividend increase/decrease (growth rate) % per period: 1.70%
Expected next dividend payment date: 25/08/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 26/07/2022
Previous dividend payment date: 27/05/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 27/04/2022
Dividend History:
2022-05-12--$0.20
2021-11-10--$0.18
2021-05-13--$0.18
2022-02-10--$0.20
2021-08-12--$0.18
2021-02-11--$0.18
Dividend growth rate is -94.27% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
45.48%
Net debt to equity ratio:
-135.18%
Debt to assets ratio:
3.21%
Net debt to assets ratio:
-9.55%
Debt-to-asset ratio is -95.67% below industry average
Ability to repay debt:
Interest coverage ratio:
18.28
Interest coverage ratio is -64.21% less than industry average
Looking forward:
Debt growth rate:
74.36%
Annual debt growth is 238% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.669
Statistical significance of correlation:
SCHW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.637
Stock price is 5.08% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.637
Correlation of price movement with Nasdaq (^IXIC):
0.029
Covariance of price movement with the market:
0.044
Kurtosis
6.088
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.504
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
SCHW
Gross Profit Margin Ratio:
62%
Operating Profit Margin Ratio:
51.56%
Operating profit margin is 166.20% higher than the industry
Net Profit Margin Ratio:
62%
Effective Tax Rate:
23.96%
Effective tax rate is 20.59% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.00%
Return on equity (ROE) is -50.74% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.85%
Return on assets (ROA) is -84.55% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
32.71
Current ratio is 677.67% above industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 5.5 years
Stock based compensation to net income ratio:
2.49%
In-depth Efficiency Analysis
Revenue generated per employee:
524.9K
Each employee generates -71% less revenue than industry average revenue per employee
EBITDA generated per employee:
263.8K
Each employee generates -6% less EBITDA than industry average revenue per employee
Profit generated per employee:
164.0K
Each employee generates -4% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
78.3K
Each employee generates -437% less free cash flow than industry average revenue per employee
Assets/Capital per employee
701.1K
Each employee generates -437% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SCHW
MORGAN STANLEY (XNYS:MS)
ROYAL BANK OF CANADA (XNYS:RY)
THE TORONTO-DOMINION BANK (XNYS:TD)
AMERICAN EXPRESS COMPANY (XNYS:AXP)
HSBC HOLDINGS PLC (XNYS:HSBC)
THE GOLDMAN SACHS GROUP, INC. (XNYS:GS)
HDFC BANK LIMITED (XNYS:HDB)
WELLS FARGO & COMPANY (XNYS:WFC)
-
Current Analyst Ratings
Strong buy�21%
Buy�38%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
18.48B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
1.79B
2.88B
-
6.42B
6.89B
471.00M
- 792000.00K
1.07B
8.81B
508.00M
1.19B
9.29B
9.53B
5.77B
7.59B
1.82B
5.77B
Statement of Cash Flow
Date:
Period:
304.00M
Differed Income Tax :
- 19000.00K
Stock Based Compensation :
144.00M
Change in Working Capital :
1.22B
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
3.05B
Investments in PP&E:
- 296000.00K
Net Acquisitions:
-
Purchases of Investments:
- 30710000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
91.13B
54.45B
145.57B
84.07B
-
- 91126000.00K
138.52B
3.50B
11.95B
9.23B
-
-
-
24.68B
567.11B
680.95B
-
4.23B
-
-
-
4.23B
21.87B
606.75B
628.62B
-
632.85B
20.00M
26.90B
- 11045000.0K
32.23B
March 31, 2022 at 6:00:00 AM
2.86B
48.10B
680.95B
-
26.11B
- 65019000.0K
10.01B
17.36B
- 3642000.00K
-
740.00M
-
- 509000.00K
24.38B
24.61B
-
24.02B
117.36B
93.34B
3.05B
- 296000.00K
2.76B
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
SCHW
2023
2024
2025
2026
2027
$71.94
$77.07
$82.57
$88.47
$94.78