SCHW
The Charles Schwab Corporation
Financial Services · Capital Markets · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Strong scores across growth, profitability, momentum, and dividend factors reflect a business with accelerating earnings, wide margins, consistent quarterly improvement, and a well-covered growing dividend [growth.eps_diluted.yoy, profitability.operating_margin_pct, momentum.revenue_quarterly, dividend.dps_trend].
- The composite score of 69.5/100 and a Medium risk rating reflect a financially sound company with demonstrated operating leverage and durable momentum, earning a Research Candidate label [growth.revenue.yoy, profitability.net_margin_pct].
- The absence of a macro theme assignment means no thematic tailwind was applied, which structurally limits the composite score relative to peers that qualify under one of the 24 tracked themes [theme.none].
Why Not Higher
- Schwab's lack of assignment to any of the 24 tracked macro themes means the model applied no thematic tailwind, which structurally constrains the composite score [theme.none].
- The financial health factor score was limited, and while the debt-to-equity ratio of 0.45 and total assets of $490,995,000,000 are noted, the available evidence does not support a more specific explanation for what held this component back [financial_health.debt_to_equity, financial_health.total_assets].
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from $19,606,000,000 in FY2024 to $23,921,000,000 in FY2025, a gain of +22.0%. Net income rose +49.0% over the same period, from $5,942,000,000 to $8,852,000,000, while diluted EPS expanded +55.5% from $2.99 in FY2024 to $4.65 in FY2025.
The model rewarded the combination of double-digit top-line expansion and even faster bottom-line growth, with EPS outpacing revenue growth by a wide margin, signaling meaningful operating leverage across FY2024 to FY2025.
In FY2025, Schwab posted an operating margin of 47.9%, a net margin of 37.0%, and a return on equity of 17.9%.
The model recognized the combination of a near-50% operating margin and a 37.0% net margin as indicative of a highly efficient business, while the 17.9% ROE in FY2025 reflects solid but not exceptional returns on shareholders' capital, which likely tempered the score slightly below the maximum.
Filing evidence currently available does not support a more specific explanation for this factor.
Revenue rose consecutively across the last four quarters: $5,851,000,000 in 2025Q2, $6,135,000,000 in 2025Q3, $6,336,000,000 in 2025Q4, and $6,482,000,000 in 2026Q1. Net income followed a similar upward path from $2,126,000,000 in 2025Q2 to $2,479,000,000 in 2026Q1, and operating income climbed from $2,803,000,000 in 2025Q2 to $3,188,000,000 in 2026Q1.
The model rewarded the unbroken sequential improvement across all three metrics over four consecutive quarters, though the pace of quarter-over-quarter gains moderated somewhat by 2026Q1, which may explain why the score did not reach the maximum.
Dividends per share rose from $0.84 in FY2022 to $1.00 in FY2023, held at $1.00 in FY2024, and increased again to $1.08 in FY2025, while the dividend payout ratio in FY2025 stood at 26.3% of net income.
The model rewarded a consistent and growing dividend track record alongside a conservative 26.3% payout ratio in FY2025, which signals that the dividend is well-covered by earnings and leaves substantial room for future increases or capital retention.
Schwab is not currently assigned to any of the 24 tracked macro themes.
The absence of a macro theme assignment means the model did not apply any thematic tailwind score to this security; this reflects the current classification methodology and should not be read as a negative signal about the company's business or prospects.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Charles Schwab delivered strong financial performance in FY2025, with revenue growing +22.0% year-over-year to $23,921,000,000 and net income surging +49.0% to $8,852,000,000, reflecting meaningful operating leverage as diluted EPS expanded +55.5% to $4.65 [growth.revenue.yoy, growth.net_income.yoy, growth.eps_diluted.yoy]. The business operates with exceptional profitability, posting a near-50% operating margin of 47.9% and a net margin of 37.0% in FY2025 [profitability.operating_margin_pct, profitability.net_margin_pct]. Momentum remains intact through the most recent quarter, with revenue, net income, and operating income all rising sequentially across four consecutive quarters through 2026Q1 [momentum.revenue_quarterly, momentum.net_income_quarterly, momentum.operating_income_quarterly]. The dividend profile is conservative and growing, with a payout ratio of just 26.3% in FY2025 and dividends per share rising to $1.08, leaving ample room for future capital allocation flexibility [dividend.payout_ratio, dividend.dps_trend].
Plain English
Schwab is making a lot more money than it was a year ago — revenue jumped 22% and earnings per share grew even faster at over 55% — and it keeps growing quarter after quarter while paying a steadily rising dividend that only uses up about a quarter of its profits [growth.revenue.yoy, growth.eps_diluted.yoy, dividend.dps_trend, dividend.payout_ratio].
Bull Case vs. Bear Case
Bull Case
- Exceptional operating leverage: net income grew +49.0% and diluted EPS expanded +55.5% on a +22.0% revenue gain in FY2025, demonstrating that profits are growing far faster than the top line [growth.revenue.yoy, growth.net_income.yoy, growth.eps_diluted.yoy].
- Best-in-class margins with a 47.9% operating margin and 37.0% net margin in FY2025 signal a highly efficient, scalable business model [profitability.operating_margin_pct, profitability.net_margin_pct].
- Unbroken sequential quarterly growth across revenue, net income, and operating income from 2025Q2 through 2026Q1 demonstrates durable and consistent business momentum [momentum.revenue_quarterly, momentum.net_income_quarterly, momentum.operating_income_quarterly].
Bear Case
- The pace of sequential quarterly gains moderated by 2026Q1 — for example, net income grew only modestly from $2,459,000,000 in 2025Q4 to $2,479,000,000 in 2026Q1 — suggesting the rate of improvement may be slowing [momentum.net_income_quarterly].
- Return on equity of 17.9% in FY2025, while solid, is not exceptional relative to the company's high margins, which may reflect the capital-intensive nature of the balance sheet with $490,995,000,000 in total assets [profitability.roe_pct, financial_health.total_assets].
- Schwab is not currently assigned to any of the 24 tracked macro themes, meaning the model applies no thematic tailwind to this security, which weighs on the composite score [theme.none].
What Could Change the Picture
Bullish Triggers
- An acceleration in the quarter-over-quarter pace of revenue or net income growth beyond the moderation seen entering 2026Q1 would reinforce the bull case for sustained operating leverage [momentum.revenue_quarterly, momentum.net_income_quarterly].
- A meaningful increase in dividends per share beyond the $1.08 paid in FY2025, supported by the low 26.3% payout ratio, would signal growing management confidence in earnings durability [dividend.dps_trend, dividend.payout_ratio].
Bearish Triggers
- A reversal in the sequential quarterly growth trend — particularly a decline in operating income from the $3,188,000,000 reached in 2026Q1 — would undermine the momentum thesis [momentum.operating_income_quarterly].
- A significant compression in operating or net margins from the current 47.9% and 37.0% levels would suggest the efficiency gains driving EPS outperformance are not sustainable [profitability.operating_margin_pct, profitability.net_margin_pct].
Risk Profile
Medium RiskSchwab carries a debt-to-equity ratio of 0.45 and manages a balance sheet with $490,995,000,000 in total assets as of FY2025, reflecting the scale typical of a large financial services firm [financial_health.debt_to_equity, financial_health.total_assets]. Quarterly momentum remains positive but the pace of sequential gains moderated into 2026Q1, with operating income growth nearly flat between 2025Q4 and 2026Q1, which warrants monitoring for any further deceleration [momentum.operating_income_quarterly].
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.