Charles Schwab (SCHW), Goldman Sachs (GS) profits soar in Q3

Highlights

  • The Dow Jones US Banks Index (DJUSBK) generated a 38.11 return YTD. 

  • Charles Schwab Corporation (NYSE: SCHW) posted revenue of US$4.57 billion, up 87% YoY. Its net income grew 119% YoY.

  • Goldman Sachs Group, Inc. (NYSE: GS) revenue increased by 26% to US$13.61 billion in the third quarter, and net earnings rose 60% to US$5.38 billion.

Stocks of Charles Schwab Corporation (NYSE: SCHW) and Goldman Sachs Group, Inc. (NYSE: GS) rallied after declaring their strong third-quarter results on Friday. 

The SCHW stock traded at US$80.475, up 3.03%, while GS stock traded at US$399.70, up 2.17%, at around 10:49 am ET.

Here are the third-quarter highlights of the two companies.

Charles Schwab Corporation 

For the September quarter of 2021, SCWB posted net revenue of US$4.57 billion, an 87% improvement YoY, compared to US$2.45 million in the same quarter of 2020.

The interest income rose 51% YoY to US$2.03 billion. The asset management and administration fees were US$1.1 billion, up 28%; trading revenue was US$964 million; bank deposit account fees were US$323 million; and other income was US$152 million.

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Its net income for the third quarter of 2021 was US$1.5 billion, up 119% YoY, compared to US$0.698 million in the year-ago period. The earnings per share diluted were US$0.74 compared to US$0.48 in the third quarter of 2020.

The company reported a return on equity (ROE) of 12% and a return on tangible common equity (ROTCE) of 23%. SCWB’s core net new assets rose 28% to US$139.0 billion, and the total client assets reached US$7.61 trillion, 14% growth year-to-date.

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Charles Schwab provides wealth, banking, and asset management, and financial advisory services. It has 32.7 million active brokerage accounts, 2.2 million corporate retirement plan participants, 1.6 million banking accounts, and an approximate US$7.61 trillion of client assets. 

Its new brokerage accounts reached 6.0 million year-to-date. 

The San Francisco, California-based company has a market capitalization of US$151.4 billion and a P/E of 33.84. The dividend yield is 0.94%, and the annualized dividend is US$0.72.

Charles Schwab stock closed at US$78.11 with a share volume of 4,802,594 on Oct 14. 

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Quarterly earnings: Charles Schwab Corporation (NYSE: SCHW), Goldman Sachs Group, Inc. (NYSE: GS)

Source – pixabay

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Goldman Sachs Group, Inc. 

The net revenue was US$13.61 billion, up 26% YoY, for the third quarter ended September 30, 2021. The investment banking segment generated net revenue of US$3.70 billion, up 88% YoY; global markets contributed US$5.61 billion, up 23% YoY; consumer & wealth management made US$2.02 billion, up 35% YoY; growth and asset management generated US$2.28 billion, down 18% YoY. 

The net earnings were US$5.38 billion, a 60% increase from the net earnings of US$3.38 billion for Q3 2020. The earnings per common share (EPS) diluted were US$14.93 compared to US$8.98 per share diluted for the corresponding quarter a year ago.

The company’s provision for credit losses was US$175 compared to US$278 million for Q3, 2020. The Board of Directors declared a dividend of US$2.00 per share for shareholders on record as of December 2, 2021, to be paid on December 30.

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The return on common shareholders’ equity (ROE) was 22.5%, and the return on average tangible common shareholders’ equity (ROTE) was 23.8% for the September quarter of 2021. Goldman’s Global core liquid assets averaged US$356 billion for Q3 this year.

Goldman Sachs Group provides a range of financial services, including investment banking, consumer banking, securities, and investment management. Its current market cap is US$134 billion, and the P/E is 7.17. The annualized dividend is US$8.00, and the dividend yield is 2.07%.

Goldman stock closed at US$391.2 on Oct 14, with a share volume of 3,380,905.

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Bottomline

The Dow Jones US Banks Index (DJUSBK) generated a 38.11% return YTD. In contrast, Charles Schwab gave a 50.74% return, while Goldman gave a 51.56% return YTD. However, investors should analyze the stocks carefully before investing. 

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