The Charles Schwab Corporation (SCHW): fair value, margin of safety and Wheel Score

Is SCHW undervalued?

The Charles Schwab Corporation (SCHW) closed at 96.80 on 16 Oct 2026. The GLS average fair value - the simple average of the 9 valuation models that produced a positive number - is 113.65, so the price sits 15% below it. 2 of the 9 models value the shares above the current price. A margin of safety between 10% and 30% is where most of the Sunday Scan candidates come from.

There is a wide gap between DDM (18.10) and GLS Growth (356.24). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.

The nightly engine files SCHW under Value: positive earnings at a P/E of 18 or less.

Nine valuation models for SCHW

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

The Charles Schwab Corporation scores 6 of 9 on the Piotroski F-score: a middling result that passes the Sunday Scan's "6 or more" rule. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. A GLS Moat score of 7.6/10 puts SCHW among the more durable businesses we track: over ten years the metrics the score watches (revenue, EPS, book value, margins, cash flow, ROIC) have mostly moved the right way, year after year.

Returns on capital are moderate - ROIC 11.0%, ROE 17.9%, ROA 1.8% - with debt at 0.63 times equity and a free-cash-flow yield of 2.2%.

The dividend yield is 1.27% with a payout ratio of 24% - a small yield that leaves most of the earnings in the business. Revenue comes mainly from Investor Services 80%, Advisor Services 21% (quarter Q4 FY2025).

Institutional ownership scores 10/10, insider activity 2/10 and Congressional trading 6/10 on the GLS smart-money scales.

Wheel Score 83: Prime

With a Wheel Score of 83, The Charles Schwab Corporation sits in the Prime band - price, quality and premium all line up for the wheel strategy. The parts: Value 19/25, Health 13/20, Moat 11/15, Premium 20/20, Stability 20/20. A high score is a ranking, not a signal: it says nothing about timing, the earnings date or your position size.

Implied volatility is 36% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. The option chain is deep: 469,845 contracts of open interest across all expiries, which means tight fills at most strikes.

Volume runs at 13.1M shares a day on a market cap of $167.4B, with a beta of 0.78 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 20 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

No upcoming earnings date is recorded for SCHW in the nightly calendar.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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