Charles Schwab’s board of directors has approved a new $20 billion stock repurchase program, signaling confidence in the company’s position. Following the announcement, shares of the financial services giant rose 1.2% in after-hours trading.
The program
The newly approved buyback replaces Schwab’s previous repurchase program, which still had approximately $6.9 billion remaining. In addition to the buyback, Schwab confirmed it will maintain its regular quarterly cash dividend at $0.27 per common share. The dividend is payable on August 22 to stockholders of record as of the close of business on August 8.
Company statement
According to the company, Schwab has 1.822 billion weighted-average common and equivalent shares outstanding. “The board’s decision regarding the share repurchase program reflects Schwab’s sustained business and financial momentum as well as our continued confidence in the long-term prospects for the firm,” Co-Chairman Walt Bettinger said in a statement. Chief Financial Officer Mike Verdeschi added, “The combination of our strong balance sheet, diversified financial model, and robust capital levels keeps us well-positioned to continue supporting client growth while concurrently returning excess capital to our stockholders in multiple forms as a part of our through-the-cycle financial growth story.”
Charles Schwab’s history
Based in Westlake, Texas, Charles Schwab is one of the biggest wealth management firms in the United States. It serves retail investors and independent financial advisors, with total client assets reportedly reaching $10.76 trillion at the end of the second quarter.
Comeback
After a difficult 2023, Schwab has refocused on reducing short-term debt and driving growth. The company has succeeded in attracting new clients and deepening relationships with existing ones. Investors have seemingly responded positively. Schwab’s stock has climbed 30% year-to-date, significantly outperforming the S&P 500’s 8.2% gain over the same period.
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Author: Isabella Torregiani
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