A Comprehensive Look at Charles Schwab Corp's Dividend Performance and Sustainability
Charles Schwab Corp (SCHW, Financial) recently announced a dividend of $0.25 per share, payable on 2023-11-24, with the ex-dividend date set for 2023-11-08. As investors anticipate this upcoming payment, the focus also extends to the company's dividend history, yield, and growth rates. Utilizing data from GuruFocus, let's delve into Charles Schwab Corp's dividend performance and evaluate its sustainability.
What Does Charles Schwab Corp Do?
Charles Schwab Corp operates in brokerage, wealth management, banking, and asset-management businesses. The company boasts a large network of brick-and-mortar brokerage branch offices, a robust online investing website, mobile trading capabilities, a bank, and a proprietary asset management business. It also provides services to independent investment advisors. As of the end of December 2022, the company managed over $7 trillion of client assets, making it one of the largest firms in the investment business. The vast majority of its revenue is generated from the United States.
A Glimpse at Charles Schwab Corp's Dividend History
Charles Schwab Corp has upheld a consistent dividend payment record since 1989, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 1989, earning it the esteemed title of a dividend aristocrat. This honor is bestowed upon companies that have increased their dividend each year for at least the past 34 years.
Breaking Down Charles Schwab Corp's Dividend Yield and Growth
As of today, Charles Schwab Corp currently has a 12-month trailing dividend yield of 1.78% and a 12-month forward dividend yield of 1.83%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Charles Schwab Corp's annual dividend growth rate was 7.30%. Extended to a five-year horizon, this rate increased to 19.50% per year. Over the past decade, Charles Schwab Corp's annual dividends per share growth rate stands at an impressive 16.30%.
Based on Charles Schwab Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Charles Schwab Corp stock as of today is approximately 4.34%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Charles Schwab Corp's dividend payout ratio is 0.32.
Charles Schwab Corp's profitability rank of 7 out of 10 as of 2023-09-30 suggests good profitability prospects. The company has reported positive net income each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
Charles Schwab Corp's growth rank of 7 out of 10 suggests a good growth trajectory relative to its competitors. Charles Schwab Corp's revenue has increased by approximately 10.50% per year on average, a rate that outperforms approximately 57.42% of global competitors. The company's 3-year EPS growth rate of approximately 13.00% per year on average outperforms approximately 52.46% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 15.90% outperforms approximately 60.98% of global competitors.
Conclusion
Based on Charles Schwab Corp's consistent dividend payments, impressive growth rate, reasonable payout ratio, high profitability, and robust growth metrics, the company appears to be a promising candidate for investors seeking sustainable dividends. However, as with any investment, potential investors should conduct their own due diligence before making a decision.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.