Analyzing UBS Group (NYSE:UBS) & Charles Schwab (NYSE:SCHW)

Charles Schwab (NYSE:SCHW) and UBS Group (NYSE:UBS) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Valuation and Earnings

This table compares Charles Schwab and UBS Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Charles Schwab	$26.02 billion	6.42	$8.85 billion	$5.50	17.58
UBS Group	$76.12 billion	1.98	$7.77 billion	$2.94	16.38

Charles Schwab has higher earnings, but lower revenue than UBS Group. UBS Group is trading at a lower price-to-earnings ratio than Charles Schwab, indicating that it is currently the more affordable of the two stocks.

Dividends

Charles Schwab pays an annual dividend of $1.28 per share and has a dividend yield of 1.3%. UBS Group pays an annual dividend of $0.36 per share and has a dividend yield of 0.7%. Charles Schwab pays out 23.3% of its earnings in the form of a dividend. UBS Group pays out 12.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Charles Schwab has increased its dividend for 1 consecutive years and UBS Group has increased its dividend for 5 consecutive years.

Insider and Institutional Ownership

84.4% of Charles Schwab shares are owned by institutional investors. 6.3% of Charles Schwab shares are owned by company insiders. Comparatively, 1.0% of UBS Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Charles Schwab has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, UBS Group has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Charles Schwab and UBS Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Charles Schwab	1	4	16	1	2.77
UBS Group	2	4	6	1	2.46

Charles Schwab presently has a consensus target price of $118.32, suggesting a potential upside of 22.38%. UBS Group has a consensus target price of $60.30, suggesting a potential upside of 25.25%. Given UBS Group’s higher probable upside, analysts clearly believe UBS Group is more favorable than Charles Schwab.

Profitability

This table compares Charles Schwab and UBS Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Charles Schwab	38.79%	24.53%	2.14%
UBS Group	13.10%	10.50%	0.57%

Summary

Charles Schwab beats UBS Group on 12 of the 17 factors compared between the two stocks.

About Charles Schwab

The Charles Schwab Corporation, together with its subsidiaries, operates as a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services in the United States and internationally. The company operates in two segments, Investor Services and Advisor Services. It offers brokerage accounts with equity and fixed income trading, margin lending, options trading, futures and forex trading, and cash management capabilities, including certificates of deposit; third-party mutual funds through the Mutual Fund Marketplace and Mutual Fund OneSource service, as well as mutual fund trading and clearing services to broker-dealers; exchange-traded funds; advisory solutions for managed portfolios, separately managed accounts, customized personal advice for tailored portfolios, specialized planning, and full-time portfolio management; banking products comprising checking and savings accounts, first lien residential real estate mortgage loans, home equity lines of credit, and pledged asset lines; and trust custody services, personal trust reporting services, and administrative trustee services. It also provides digital retirement calculators; integrated web-, mobile-, and software-based trading platforms, real-time market data, options trading, premium research, and multi-channel access; self-service education and support tools; online research and analysis tools; equity compensation plan sponsors full-service recordkeeping for stock plans, stock options, restricted stock, performance shares, and stock appreciation rights; retirement plan services; mutual fund clearing services; and advisor services, including interactive tools and educational content. The Company operates through branch offices. The Charles Schwab Corporation was incorporated in 1971 and is headquartered in Westlake, Texas.

About UBS Group

UBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide. It operates through five divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy. The company offers investment advice, estate and wealth planning, investing, corporate and banking, and investment management, as well as mortgage, securities-based, and structured lending solutions. It also provides personal banking products and services, such as deposits, credit and debit cards, and online and mobile banking, as well as lending, investments, retirement, and wealth management services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, and transaction banking solutions for payment and cash management services, trade and export finance, and global custody solutions. In addition, the company offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services. Further, it advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; distributes, trades in, finances, and clears cash equities and equity-linked products; structures, originates, and distributes new equity and equity-linked issues; and originates, distributes, manages risk, and provides liquidity in foreign exchange, rates, credit and precious metals. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is headquartered in Zurich, Switzerland.