Back to top

Image: Bigstock

If You Invested $1000 in The Charles Schwab Corporation a Decade Ago, This is How Much It'd Be Worth Now

Read MoreHide Full Article

For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in The Charles Schwab Corporation (SCHW - Free Report) ten years ago? It may not have been easy to hold on to SCHW for all that time, but if you did, how much would your investment be worth today?

The Charles Schwab Corporation's Business In-Depth

With that in mind, let's take a look at The Charles Schwab Corporation's main business drivers.

Headquartered in San Francisco, CA, The Charles Schwab Corporation is a savings and loan holding company, providing wealth management, securities brokerage, banking, asset management, custody and financial advisory services.

The company's main subsidiaries include Charles Schwab & Co. (securities broker-dealer), Charles Schwab Investment Management (an investment advisor  for Schwab's proprietary mutual funds and Schwab’s exchange-traded funds) and Charles Schwab Bank (a federal savings bank).

Schwab provides financial services to individuals and institutions through two reportable segments – Investor Services and Advisor Services.

The Investor Services segment (constituting 71.8% of net revenues in 2020) includes Schwab’s retail brokerage and banking operations as well as retirement plan and corporate brokerage services. Through this segment, the company offers research, analytic tools, online portfolio planning tools, performance reports, market analysis and educational material to its clients.

The Advisor Services segment (28.2%) offers custodial, trading and support services to independent investment advisors. It also provides retirement business services to independent retirement plan advisors and record-keepers.

In May 2020, Schwab acquired certain of assets of USAA’s Investment Management Company, including brokerage and managed portfolio accounts. In June, it acquired Motif’s technology and intellectual property assets, while in July it acquired Naples, FL-based Wasmer, Schroeder & Company. In October, the company completed the buyout of TD Ameritrade, leading to the formation of a behemoth in the brokerage industry.

As of Dec 31, 2020, the company had 29.6 million active brokerage accounts, 1.5 million banking accounts and 2.1 million corporate retirement plan participants.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in The Charles Schwab Corporation ten years ago, you're likely feeling pretty good about your investment today.

A $1000 investment made in April 2011 would be worth $3,595.09, or a 259.51% gain, as of April 7, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.

In comparison, the S&P 500 gained 205.04% and the price of gold went up 14.53% over the same time frame.

Analysts are anticipating more upside for SCHW.

Schwab’s shares have outperformed the industry over the past six months. The company has a decent earnings surprise history. Its earnings have surpassed the Zacks Consensus Estimate in two of the trailing four quarters. Opportunistic acquisitions over the past year have strengthened Schwab’s position as a leading brokerage player, and will be accretive to earnings in the upcoming quarters. Its efficient capital deployment activities reflect a solid balance sheet position. While continued near-zero interest rates and no chance of any increase in the same in the near term remains a major concern, and persistently increasing costs will hurt profitability to some extent, offering commission-free trading has been leading to rise in client assets and brokerage accounts. This, in turn, will continue improving the company's market share.

The stock has jumped 5.72% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 3 higher, for fiscal 2021; the consensus estimate has moved up as well.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


The Charles Schwab Corporation (SCHW) - free report >>

Published in