Schwab's stock has climbed 13% this year, while the Russell 1000 Financial Services Index remains flat. The shares, which have rebounded to $18 after hitting $11.36 in March, are trading at 23 times the amount it's expected to earn this year, compared with 17 times for its rivals.
Schwab beat analysts' first-quarter earnings estimates, lifting investors' hopes even as its net income fell 29%. The San Francisco-based company has been trimming fees to maintain its lead in a fiercely competitive industry. Meeting shareholders' profit expectations for the next 18 months won't be easy.
Schwab shares are trading at 18 times next year's projected net income, compared with 15 times for its peers. Its price-to-book value stands at 4.7, topping the 2.5 industry average. TD Ameritrade Holding
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