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Schwab (SCHW) Stock Gains 1% on Improved August Metrics


Shares of The Charles Schwab Corporation SCHW gained more than 1.1% following the company's monthly activity report for Aug 2016, last week. The monthly metrics reflected an overall improvement.

The total client assets were $2.7 trillion at August end, increasing 10% year over year and flat from the prior month. Further, client assets receiving ongoing advisory services were $1.36 trillion as of Aug 31, 2016, up 11% year over year and nearly 1% from the prior month.

Additionally, average interest earning assets were $194.3 billion, at August end, reflecting a 21% increase on a year-over-year basis and 1% from Jul 2016. Also, net new assets, through both existing and new clients, totaled $10.4 billion, up 13% year over year and 16% from the prior month.

Schwab opened 96,000 new brokerage accounts in Aug 2016, a growth of 10% from the prior-year month and 14% from Jul 2016. The company’s active brokerage accounts totaled $10.02 million at the end of the reported month, compared with $9.67 million in Aug 2015 and $9.99 million in Jul 2016.

The client’s banking accounts at the end of August totaled 1.08 million, growing 6% from the prior-year period and 1% from the previous month. Further, the number of retirement plan participants was 1.57 million, which implies an increase of 5% year over year and flat at the preceding-month level.

The new fully automated investment advisory service offered by Schwab is likely to boost its trading revenues going forward. However, the company’s elevated expenses, sensitivity to interest rates and significant dependence on fee-based revenue streams remain matters of concern.

Currently, Schwab has a Zacks Rank #3 (Hold). In case you want to check out the Zacks Rank #1 (Strong Buy) investment brokerage stocks as well stocks from the other sectors, you can see the complete list of today’s Zacks #1 Rank stocks here.

Performance of Other Investment Brokers

TD Ameritrade Holding Corporation AMTD reported $765.4 billion in total client assets, up 13% year over year and 1% from the prior month. Also, AMTD came up with average client trades per day of 425,000 in its activity report for Aug 2016. The reported figure plunged 21% from the prior-year period and 6% from the prior month.

E*TRADE Financial Corporation ETFC reported a fall in its Daily Average Revenue Trades (DARTs) in the monthly market activity report for Aug 2016. DARTs were 179,908, down 20.1% on a year-over-year basis and 2.2 from Jul 2016.

Interactive Brokers Group, Inc.’s IBKR total client DARTs were 576,000 in August, down 22% from Aug 2015 and 4% from Jul 2016. However, total customer accounts of 365,300 were up 15% from the prior-year month and 1% from the preceding month.

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