Is Charles Schwab Stock (SCHW) a Good Investment? (2024)

As of May 24, 2024, Charles Schwab Corp had a $132.3 billion market capitalization, putting it in the 99th percentile of companies in the Investment Banking & Brokerage Services industry.

Currently, Charles Schwab Corp’s price-earnings ratio is 30.0. Charles Schwab Corp’s trailing 12-month revenue is $25.6 billion with a 17.1% profit margin. Year-over-year quarterly sales growth most recently was 1.4%. Analysts expect adjusted earnings to reach $3.322 per share for the current fiscal year. Charles Schwab Corp currently has a 1.4% dividend yield.

Before you choose to buy, sell or hold Charles Schwab Corp stock, you’ll want to analyze how it has been graded. Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, making sense of financial ratios, reading income statements and analyzing recent stock movement. To help individual investors decide whether or not to buy (SCHW) stock, AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way that is suitable for investors of all knowledge levels.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for each of five key investing factors: value, growth, momentum, earnings revisions and quality. Here, we’ll take a closer look at Charles Schwab Corp’s stock grades for value, growth and quality. Learn more about A+ Investor here!

As of May 24, 2024, Charles Schwab Corp had a $132.3 billion market capitalization, putting it in the 99th percentile of companies in the Investment Banking & Brokerage Services industry.

Currently, Charles Schwab Corp’s price-earnings ratio is 30.0. Charles Schwab Corp’s trailing 12-month revenue is $25.6 billion with a 17.1% profit margin. Year-over-year quarterly sales growth most recently was 1.4%. Analysts expect adjusted earnings to reach $3.322 per share for the current fiscal year. Charles Schwab Corp currently has a 1.4% dividend yield.

Before you choose to buy, sell or hold Charles Schwab Corp stock, you’ll want to analyze how it has been graded. Stock evaluation requires access to huge amounts of data and the knowledge and time to sift through it all, making sense of financial ratios, reading income statements and analyzing recent stock movement. To help individual investors decide whether or not to buy (SCHW) stock, AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way that is suitable for investors of all knowledge levels.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for each of five key investing factors: value, growth, momentum, earnings revisions and quality. Here, we’ll take a closer look at Charles Schwab Corp’s stock grades for value, growth and quality. Learn more about A+ Investor here!

Growth Grade:

The foundation of growth investing is seeking out stocks of companies exhibiting strong, consistent and prolonged growth that is expected to continue into the future.

In order to compute the Growth Score and assign it a letter grade, the percentile ranks for each of the three individual components‐consistency of annual sales growth, five‐year sales growth rankings adjusted for extreme levels, and consistency of positive annual cash from operations‐must be determined. These three rank figures are added together, and the sum is ranked against the entire stock universe to arrive at a company’s Growth Score to create an equal distribution of grades.

The companies in the bottom 20% of the stock universe receive Growth Grades of F, considered Very Weak, while those in the top 20% receive A grades, which are considered Very Strong.

Charles Schwab Corp has a Growth Score of 94, which is Very Strong.

Momentum Grade:

Momentum grades help uncover stocks experiencing anomalously high rates of return; research finds that stocks with high relative levels of momentum tend to outperform, whereas those with low levels of momentum tend to continue underperforming. Momentum is based on the price change of a stock over a specified period relative to all other stocks.

Typically, AAII looks at the weighted relative strength over the trailing four quarters. The weighted four-quarter relative strength rank is the relative price change for each of the past four quarters. The most recent quarterly price change is given a weight of 40% and each of the three previous quarters are given a weighting of 20%.

Charles Schwab Corp has a Momentum Score of 72, which is Strong.

Estimate Revisions Grade:

The Earnings Estimate Revisions Score considers the magnitude of a company’s earnings surprise in its last two reported fiscal quarters. Often, positive surprises beget further positive surprises‐or at least continued sales growth (the exact opposite is generally true, too).

Estimate revisions offer an indication of what analysts are thinking about the short-term prospects of a firm. The Earnings Estimate Revisions Score is based on the statistical significance of a firm’s last two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months.

Charles Schwab Corp has an Earnings Estimate Revisions Score of 26, which is Negative.

In addition to Growth, Momentum and Estimate Revisions, A+ Investor also provides grades for Value and Quality.

Successful stock investing involves buying low and selling high, so stock valuation is an important consideration for stock selection. Buying stocks that are going to go up typically means buying stocks that are undervalued in the first place, although momentum investors may argue that point.

AAII’s A+ Investor Quality Grade comes from the ranking of key metrics. Specifically, the Quality Grade is the percentile rank of the composite return on assets (ROA), return on invested capital (ROIC), gross profit relative to assets, buyback yield, change in total liabilities to assets, accruals, Z double prime bankruptcy risk (Z) score and F—Score.

These 2 key factors, when combined with the above, provide a holistic view into a stock. Further, by joining A+ Investor you can see whether Charles Schwab Corp’s stock passes any of our 60+ stock screens that have outperformed the market since their creation.

Overall, Charles Schwab Corp stock has a Growth Grade of A, Momentum Grade of B Earnings Estimate Revisions Grade of D.

Whether or not you should buy Charles Schwab Corp stock will ultimately depend on your individual goals, risk tolerance and allocation. AAII can help you figure these out and identify which investments align with what works best for you.

Lastly, it’s important to evaluate a stock by comparing it against others in the same industry. Review the table below to see how Charles Schwab Corp stock stands up against its competitors. Click into any of the below tickers to see their stock grades for value, momentum, quality and EPS revisions.

You can use the information about how Charles Schwab Corp is graded to determine if you should invest in this stock. However, you should decide whether Charles Schwab Corp’s stock is a buy, sell or hold based on a combination of grades, metrics, ratios and U.S. Securities and Exchange Commission (SEC) reports.

Investors are encouraged to do their own due diligence and research. In this way, individuals can effectively become managers of their own assets—without having to rely on others for financial independence. You can count on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis.

So, if you’re still on the fence about whether Charles Schwab Corp is a buy, sell or hold, you can utilize AAII’s expansive and robust screening tools like A+ Investor to help with your decision.

A+ Investor adds to its qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions, find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.