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TD Ameritrade Stock Rises 25% in One Quarter on Assets, Acquisition

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Aug. 18 2020, Updated 6:26 a.m. ET

Relative performance

TD Ameritrade (AMTD) has seen a relatively weaker performance than other brokerage giants. The company posted EPS (earnings per share) of $0.35 in fiscal 4Q16, missing the Wall Street analyst estimates of $0.38. The company posted net income of $185 million, which is 13% lower on a YoY (year-over-year) basis.

But TD Ameritrade has seen growth in its assets and customer base. The company is eyeing strong growth after the acquisition of Scottrade Financial Services, which should help in the augmentation of its retail business.

TD Ameritrade had total customer assets of $774 billion on September 30, 2016, which represents a rise of 16% over fiscal 4Q15. The company attracted $15 billion in new assets in fiscal 3Q16, as compared to $13.6 billion in the previous quarter and $16.2 billion in the prior year quarter.

TD Ameritrade’s daily average trades fell 7% to 444,000 in 3Q16. The company is deploying more resources toward new initiatives, achieve expense efficiency and improve operating margins.

In fiscal 2016, TD Ameritrade saw EPS of $1.58, which is a 6% rise over fiscal 2015. The company added client assets totaling $60 billion with net revenues of $3.3 billion.

Brokerage firm

TD Ameritrade’s services cater to clients trading in foreign exchange, common and preferred stocks, new and secondary issue securities, fixed income securities, futures and options, ETFs, American depositary receipts, mutual funds, closed-end funds, cash management services, margin lending, and annuities. The company provides client offerings mainly through trading and investing platforms.

Among the company’s peers in the brokerage industry, E*TRADE Financial (ETFC), and Charles Schwab (SCHW) all beat their analysts’ estimates. However, Interactive Brokers Group (IBKR) missed its estimates. Together, these companies account for 0.27% of the SPDR S&P 500 ETF (SPY).

In this series, we’ll study TD Ameritrade’s client assets, new products and strategies, daily trades, dividends, and valuations.

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