In its Long/Short Opportunity Fund Q4 Investor Letter, RiverPark Funds discussed a number companies including Charles Schwab Corp (NYSE:SCHW), one of the fund’s top contributors for the fourth quarter. RiverPark is bullish on SCHW and believes that the California-based financial company is poised to “generate double-digit revenue growth, which – combined with the company’s disciplined expense control – should generate 20%+ earnings growth per year for the foreseeable future.” In this article, we’re going to take a look at the recent performance of Charles Schwab as well as at the RiverPark’s comments about the company.
Here is what RiverPark said about Charles Schwab in the letter:
Charles Schwab (Long): SCHW shares were another top contributor for the quarter as its stock reacted positively to the strong equity market, continued net client asset inflows, significant progress on tax reform, an interest rate increase in December, and the expectation for additional interest rate increases during 2018. Schwab has executed extremely well over the past several years and, despite substantially lowering trading commissions and asset management fees to gain market share, still appears poised to generate double-digit revenue growth, which, combined with the company’s disciplined expense control, should generate 20%+ earnings growth per year for the foreseeable future. These rates of growth could be substantially higher should the pace of Fed rate hikes accelerate.
Charles Schwab Corp (NYSE:SCHW) is one of the largest banks in the United States and is one of the largest brokerage firms in the country. The company provides online trading services to individuals and institutions, offering an electronic trading platform for the financial securities trading.
The company has a market cap of nearly $70 billion, and pays a quarterly dividend of $0.10 per share, which equates to 0.40$ per share annually, offering a 0.77% dividend yield. Shares of the company are up more than 1.50% so far this year, while the stock has gained 23.71% over the past 12 months. SCHW is trading at a P/E ratio of 33.05x.
Meanwhile, Charles Schwab Corp (NYSE:SCHW) is a popular stock among the hedge funds covered by Insider Monkey. As of the end of September 2017, there were 55 funds in our database with positions in the company, including Theleme Partners, Brave Warrior Capital, and SPO Advisory Corp.
Missouri-based investment firm Wedgewood Partners is also bullish on Charles Schwab. In its Q4 Investor Letter, the investment firm noted that the company is generating “excellent and expanding pre-tax profit margins, relative to its large captive and independent competitors.” Wedgewood opened a position in the company during the first quarter of 2016 and held 2.33 million shares as of the end of the third quarter of 2017.