Schwab Stock Touches 52-Week High: Is This the Right Time to Buy SCHW?

Core Viewpoint - Charles Schwab (SCHW) has reached a 52-week high of $92.65, with a 23.1% gain over the past three months, outperforming the Zacks Finance sector and the S&P 500, but underperforming the industry and Robinhood Markets, Inc. [1][9] Group 1: Revenue Drivers - Increased market volatility due to tariff policy concerns is expected to drive Schwab's trading revenues, benefiting from heightened market participation [3][4] - Schwab's acquisitions, including TD Ameritrade and USAA's Investment Management Company, have strengthened its position and diversified revenues, supporting top-line expansion [5] - The company's total client assets reached $10.35 trillion as of May 31, 2025, with a five-year CAGR of 20.1%, driven by acquisitions and market appreciation [6] Group 2: Financial Performance - Schwab's total net revenues have experienced a CAGR of 12.8% over the past five years, with managed investing solutions revenues growing at a CAGR of 12.2% [7] - The Federal Reserve's unchanged interest rates are likely to aid Schwab's net interest margin (NIM) and net interest revenue (NIR) expansion, with NIM increasing to 2.12% in 2024 from 1.98% in 2023 [10][11] - As of March 31, 2025, Schwab's cash and cash equivalents were $35 billion, and total debt was $39.9 billion, supporting its low-cost capital structure and capital distributions [13] Group 3: Shareholder Returns - Schwab announced an 8% increase in its quarterly dividend to 27 cents per share in January 2025, having raised dividends four times in the past five years [14] - The company has a share repurchase program with approximately $7.2 billion in authorization remaining as of March 31, 2025 [14] Group 4: Future Outlook - The Zacks Consensus Estimate for earnings is projected at $4.28 and $5.06 per share for 2025 and 2026, respectively, indicating growth of 31.7% for 2025 and 18.3% for 2026 [15] - Despite rising operating expenses, the company is expected to benefit from tariff policy concerns and higher interest rates, making Schwab a favorable investment option [18]