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The Charles Schwab Corporation (0L3I.L)

Company Dividend Discount ModelIndustry: Financial - DiversifiedSector: Financial Services

Valuation Snapshot

Stable Growth$105.95 - $281.06$162.01
Multi-Stage$72.87 - $79.60$76.17
Blended Fair Value$119.09
Current Price$94.60
Upside25.89%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS16.50%19.82%1.251.251.161.000.700.580.430.320.270.21
YoY Growth---0.04%7.87%15.81%42.34%20.75%34.69%32.94%21.81%25.58%3.75%
Dividend Yield--1.61%1.76%2.22%1.15%1.08%1.76%0.98%0.64%0.50%0.40%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)8,233.00
(-) Cash Dividends Paid (M)2,340.00
(=) Cash Retained (M)5,893.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,646.601,029.13617.48
Cash Retained (M)5,893.005,893.005,893.00
(-) Cash Required (M)-1,646.60-1,029.13-617.48
(=) Excess Retained (M)4,246.404,863.885,275.53
(/) Shares Outstanding (M)1,822.751,822.751,822.75
(=) Excess Retained per Share2.332.672.89
LTM Dividend per Share1.281.281.28
(+) Excess Retained per Share2.332.672.89
(=) Adjusted Dividend3.613.954.18
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$105.95$162.01$281.06
Upside / Downside12.00%71.26%197.11%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)8,233.008,768.159,338.079,945.0510,591.4811,279.9211,618.32
Payout Ratio28.42%40.74%53.05%65.37%77.68%90.00%92.50%
Projected Dividends (M)2,340.003,571.954,954.166,500.978,227.9310,151.9310,746.95

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)3,243.333,274.073,304.81
Year 2 PV (M)4,084.534,162.334,240.86
Year 3 PV (M)4,866.725,006.425,148.78
Year 4 PV (M)5,592.875,807.966,029.19
Year 5 PV (M)6,265.846,568.486,882.70
PV of Terminal Value (M)108,774.73114,028.59119,483.53
Equity Value (M)132,828.01138,847.85145,089.87
Shares Outstanding (M)1,822.751,822.751,822.75
Fair Value$72.87$76.17$79.60
Upside / Downside-22.97%-19.48%-15.86%

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