Schwab Commanding Highest Premium Valuations on Strong Growth
Charles Schwab’s (SCHW) stock has risen a record 30% during the past three months, backed by expected strong performance in 4Q16 with new assets, rising interest income, and higher advisory revenues.
Schwab’s margins have been positively affected by interest income, administration fees, increased trades, and expense management, partially offset by declining commissions.
Charles Schwab (SCHW) is expected to see subdued trades in 4Q16.
The Fed raised interest rates by 25 basis points in 4Q16 and is expected to raise them three times in 2017.
Charles Schwab’s (SCHW) Investor Services division offers brokerage, banking, services, and retirement products to corporates and individuals.
Through its advisor services segment, Charles Schwab (SCHW) is attracting clients seeking retirement and wealth management solutions.
Charles Schwab (SCHW) is expected to post earnings per share (or EPS) of $0.36 in 4Q16, a 50% increase on a year-over-year basis.
TD Ameritrade’s stock has risen 12% over the past year and 23% over the past three months on operating performance, assets, and volatility in fiscal 4Q16.
TD Ameritrade has either met or beat estimates for the past four quarters. The company has demonstrated a resilient performance amid rising competition.
TD Ameritrade’s expenses have risen over the past couple of quarters because it has spent heavily on advertisements and marketing for luring in new assets.
TD Ameritrade has seen daily trades in the range of 440,000–520,000 over. For fiscal 4Q16, volatility is expected to be marginally high for the industry.
TD Ameritrade (AMTD) has seen an expansion of its Investment Products division driven by investments in mutual funds and investment options.
In fiscal 3Q16 (ending June 30), TD Ameritrade ended with $736 billion in client assets, which is a rise of 5% over the prior year quarter.
For fiscal 4Q16 (ending September 30), TD Ameritrade (AMTD) is expected to post EPS of $0.38, as compared to $0.40 one year previously.
E*TRADE Financial’s stock has risen 15% in the past three months on operating performance, better-than-expected earnings, and a strong balance sheet.
E*TRADE Financial is operating on lower leverage, and the company has successfully reduced its debt below $1 billion—a 50% fall from the past few quarters.
E*TRADE Financial (ETFC) has deployed funds into a development of new platforms and technologies to customize offerings and enhance client returns.
E*TRADE Financial (ETFC) operates the federally chartered savings bank E*TRADE Bank. This structure has been deployed by many major brokers in the US.
E*TRADE Financial saw its expenses fall in 2Q16 on a sequential basis. Its major spending includes advertising, market development, and FDIC insurance.
E*TRADE Financial (ETFC) is expected to see more asset gathering and existing portfolio appreciation as the overall market has risen in 3Q16.