Dream business trading at 14x 2023 P/E with mid-20s ROE. Online brokerage with a wide moat 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.
Online brokerage for retail customers and provider of services for RIAs.
Set to benefit from:
(1) asset gathering tailwinds for electronic brokerage firms, attracting net new client assets of $20-60bn each month;
(2) Inflation and higher interest rates as it sweeps clients’ excess cash into its bank;
(3) massive synergies from its TD Ameritrade acquisition, management estimates these at $4.3-4.8bn.The company is accelerating capital returns with increased dividends and $15bn buyback authorization.
CEO / co-Chairman recently made a $9.5m open market purchase.