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The Charles Schwab Corporation (SCHW-PJ) - Wall Street’s Best Digest Daily Alert - 10/15/21

This preferred stock is backed by a giant financial company.

This preferred stock is backed by a giant financial company.

The Charles Schwab Corporation (SCHW-PJ)
From Income Securities Investor

Charles Schwab Corp. (The); 4.45% Fixed Rate, Non-Cumulative, Series J Perpetual; Par $25.00; Annual Cash Dividend $1.1125; Current Indicated Yield 4.25%; Call Date 06/01/26 at $25.00; Yield to Call 3.34%; Pay Cycle 3b; Ratings, Moody’s Baa2, S&P BBB; CUSIP 808513865

Charles Schwab Corp. (SCHW) is a leading financial institution, providing investment services throughout the nation. SCHW offers wealth and asset management, securities brokerage, cash management, research, and financial advisory services. The company services individuals and institutional clients through its Investor Services and Advisory Services platforms. The Investor Services segment offers retail and banking services, retirement plan solutions, and corporate brokerage services. The Advisor Services segment provides custodial, trading, support services, and retirement business services.

As of 06/01/21, SCHW serviced $7.57 trillion client assets up 84% from a year ago, and had a record 32.3 million in active brokerage accounts.

SCHW’s 4.45% preferred issue is fixed rate and callable on 06/01/21, or on any dividend payment date thereafter, at par plus any declared and unpaid dividends. The firm reported adjusted net income of $1.48 billion or $0.70 per share, for the 2Q 2021 period ended 06/36/21. Bottom-line results more than doubled from a year earlier on exceptionally strong revenue growth. Adjusted net income topped analysts’ estimates by a penny. Net revenue of $4.53 billion jumped 85% from a year ago. Earnings and revenue benefited from strong market conditions across most areas, including strong client transaction activity.

Dividend distributions on this preferred issue are qualified and taxed at the 15-20% rate. This investment is suitable for low-risk taxable portfolios. Buy at $27.00 or lower for a 4.12% yield and a 2.63% yield to call.

Martin Fridson, CFA, Income Securities Investor,, 800-472-2680, October 2021