The Charles Schwab (SCHW), mcap=$146bn, price $78.36 vs $70.00

$SCHW pitch:
– Dream business trading at 14x 2023 P/E with mid-20s ROE.
– Online brokerage with a wide moat and nearly $7T in customer assets.
– Consistent and profitable growth since 2009 which shows no signs of moderating.
– Generates 70% of profits from 10% of customers, allowing it to improve retention by offering best-in-class customer service and products at very little or no cost.
– Set to benefit from rising interest rate environment.
– On the cusp of returning a significant amount of cash to equity holders.

$SCHW valuation:
– At 14x fwd, PE trades at the low end of its historical P/E multiple.
– Expected low double-digit earnings growth.

Exp. gain: Not specified.

Full SCHW write-up (free guest account required):

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