Universal Beteiligungs und Servicegesellschaft mbH has reduced its stake in The Charles Schwab Corporation (NYSE: SCHW) by 1.6%, selling 18,781 shares during the second quarter of 2023. According to the firm’s recent 13F filing with the Securities and Exchange Commission, Universal Beteiligungs now holds a total of 1,162,782 shares, valued at approximately $106.09 million.
This divestment reflects a broader trend, as several other hedge funds have also altered their holdings in Charles Schwab. Brighton Jones LLC notably increased its stake by 380.5% during the fourth quarter, acquiring an additional 19,195 shares to bring its total to 24,240 shares, valued at $1.79 million. Jackson Creek Investment Advisors LLC initiated a new position worth about $613,000, while Private Advisor Group LLC raised its holdings by 3.6%, now owning 101,695 shares valued at $7.96 million. Similarly, AMG National Trust Bank boosted its position in Charles Schwab by 20.7%, bringing its total to 95,801 shares, valued at $7.5 million.
The majority of Charles Schwab’s shares, approximately 84.38%, are now owned by institutional investors and hedge funds.
Analysts Issue Mixed Ratings
Recent reports from various research firms have provided different outlooks on Charles Schwab. The Goldman Sachs Group maintained a “buy” rating with a target price of $114.00 as of October 17, 2023. Keefe, Bruyette & Woods adjusted their price target from $109.00 to $111.00, also issuing an “outperform” rating. BMO Capital Markets began coverage with an “outperform” rating and a target of $110.00. Weiss Ratings, however, restated a “hold (C+)” rating, while Deutsche Bank Aktiengesellschaft raised its target from $119.00 to $120.00, maintaining a “buy” rating.
Currently, the consensus rating for Charles Schwab is “Moderate Buy,” with an average target price of $106.45 according to MarketBeat.com.
Charles Schwab’s Financial Performance
Shares of Charles Schwab traded down 1.0% to open at $94.37 on October 17, 2023. The company’s market capitalization stands at $167.70 billion, with a price-to-earnings (P/E) ratio of 22.10. Over the past year, the stock has reached a low of $65.88 and a high of $99.59. In its most recent earnings report, released on October 16, 2023, Charles Schwab reported earnings per share (EPS) of $1.31, exceeding the consensus estimate of $1.25. The company’s revenue for the quarter was $6.38 billion, surpassing analysts’ expectations of $5.93 billion, with a net margin of 35.93% and a return on equity of 21.26%. Year-over-year, revenue increased by 26.6%.
Dividend and Share Repurchase Plans
On November 28, 2023, Charles Schwab plans to pay a quarterly dividend of $0.27 per share to investors of record as of November 14, 2023. This annualizes to $1.08 with a yield of 1.1%, reflecting a payout ratio of 25.29%. On July 24, 2023, the Board of Directors announced a stock repurchase program allowing the company to repurchase up to $20 billion in shares, representing about 11.6% of its stock. Such programs often indicate that a company’s board believes its shares are undervalued.
Insider Trading Activity
Recent insider transactions at Charles Schwab include the sale of 3,072 shares by insider Jonathan S. Beatty on November 12, 2023, at an average price of $98.00, totaling $301,056.00. Following the sale, Beatty holds 11,923 shares valued at approximately $1.17 million, marking a 20.49% decrease in ownership. Additionally, insider Paul V. Woolway sold 3,205 shares on October 1, 2023, at an average price of $93.33 for a total of $299,122.65. Following this transaction, Woolway retains 34,778 shares valued at $3.25 million, reflecting an 8.44% decrease in his position.
In total, corporate insiders have sold 68,938 shares of company stock valued at $6.67 million in the past 90 days, with insiders currently holding 6.30% of the company’s stock.
The Charles Schwab Corporation provides various financial services, including wealth management, securities brokerage, banking, and financial advisory services, operating both in the United States and internationally. It functions through two primary segments: Investor Services and Advisor Services.
