Charles Schwab Corp (SCHW) is a holding company whose primary subsidiary is Charles Schwab and Co, a large retail discount securities broker serving almost 8 million investors with approximately $1.57 trillion in assets.
The company has earned a 10-15% return on equity over the last five years while growing profits and dividends between 10-20%. SCHW experienced difficulty during the recent downturn. However, the company should resume earnings growth this year as a result of:
(1) expansion of its product offerings such as its recent acquisition of Windward Investment Management which will allow it to offer low cost managed account,
(2) acquisitions,
(3) its low level of debt provides flexibility in financing growth and dividends.
