Charles Schwab Experiences Surge in Options Trading Volume

The Charles Schwab Corporation (NYSE:SCHW) observed an unusual spike in options trading on Tuesday, with a notable acquisition of 43,705 call options. This amount marks a significant increase of approximately 26% when compared to the average daily volume of 34,748 call options, indicating heightened interest from traders in the company's stock.

Insider Transactions at Charles Schwab

In a related development, Director Carolyn Schwab-Pomerantz recently sold 9,000 shares of the company's stock on July 19th. The shares were sold at an average price of $61.96, generating a total of $557,640. Following this transaction, Carolyn Schwab-Pomerantz owns 567,057 shares of the stock, with a total value of about $35.13 million. This sale had no impact on the director's ownership percentage.
Additionally, CEO Walter W. Bettinger bought 25,000 shares at an average price of $66.26 per share on July 17th, totaling approximately $1.66 million. Post-transaction, Bettinger holds 827,377 shares valued at around $54.82 million. Similarly, this transaction represented no change in ownership percentage. Over the last three months, insiders have sold a total of 98,856 shares worth approximately $6.4 million. Insiders collectively own 6.6% of the company’s stock.

Trends Among Institutional Investors

Recent activity among institutional investors shows mixed actions regarding their stakes in Charles Schwab. Price T. Rowe Associates Inc. MD increased its stake by 4.2% in the first quarter, obtaining an additional 2,946,327 shares for a total of 72,306,560 shares valued at about $5.23 billion. Darsana Capital Partners LP also substantially increased its investment, growing its position by 200% during the second quarter by adding 2,000,000 shares, bringing its total to 3,000,000 shares worth $221.07 million.
Moreover, Mondrian Investment Partners LTD raised its position significantly by over 28,736%. It now owns 1,485,637 shares worth approximately $107.47 million. Furthermore, other investors such as Healthcare of Ontario Pension Plan Trust Fund and Westwood Holdings Group Inc. also expanded their holdings. Overall, institutional investors hold a substantial 84.38% of Schwab's stock.

Wall Street Analysts' Perspectives

A variety of research analysts have recently weighed in on Schwab shares. Morgan Stanley has reduced its price target from $70 to $68, giving the stock an "equal weight" rating. Deutsche Bank also cut its price target from $77 to $76, while Bank of America adjusted its target from $72 to $66, categorizing it as an "underperform". Additionally, Keefe, Bruyette & Woods lowered their target from $80 to $76, maintaining an "overweight" rating.
Currently, the consensus among analysts includes three sell ratings, eight hold ratings, and seven buy ratings, giving the stock an average rating of "Hold" with a price target of approximately $71.82.

Performance of Charles Schwab Stock

On Tuesday, Charles Schwab's stock rose by 6.1%. During mid-day trading, the stock reached $71.96, with a total of 21,272,792 shares exchanged, significantly higher than the average volume of 8,082,911. The company has a market capitalization of approximately $127.98 billion. Its stock also has a P/E ratio of 30.51 and a P/E/G ratio of 1.43.
In its latest quarterly earnings report published on October 15th, Charles Schwab announced an EPS of $0.77, surpassing the consensus estimate of $0.75. This quarterly performance marked a 5.2% increase in revenue year-over-year, amounting to $4.85 billion compared to previous projections. Analysts predict an EPS of 3.06 for the current fiscal year.

Dividend Information for Investors

Charles Schwab recently announced a quarterly dividend of $0.25, which was distributed on August 23rd to stockholders recorded as of August 9th. The company currently has an annualized dividend of $1.00, which yields a dividend rate of 1.39%. The payout ratio stands at 41.49%, indicating a stable dividend policy.

Overview of Charles Schwab

The Charles Schwab Corporation operates as a financial services holding company, providing wealth management, securities brokerage, banking, and financial advisory services both in the United States and internationally. The company's operations are divided into two segments: Investor Services and Advisor Services.

Options, Trading, Volume