Financial Review: China Finance Online (JRJC) and Charles Schwab (SCHW)


China Finance Online (NASDAQ:JRJC) and Charles Schwab (NYSE:SCHW) are both computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Profitability

This table compares China Finance Online and Charles Schwab’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Finance Online -43.87% -59.15% -23.01%
Charles Schwab 35.27% 20.47% 1.33%

Insider and Institutional Ownership

2.9% of China Finance Online shares are owned by institutional investors. Comparatively, 79.8% of Charles Schwab shares are owned by institutional investors. 30.4% of China Finance Online shares are owned by company insiders. Comparatively, 10.9% of Charles Schwab shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

China Finance Online has a beta of 2.16, meaning that its share price is 116% more volatile than the S&P 500. Comparatively, Charles Schwab has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for China Finance Online and Charles Schwab, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Finance Online 0 0 0 0 N/A
Charles Schwab 1 4 9 0 2.57

Charles Schwab has a consensus price target of $53.54, suggesting a potential upside of 20.76%. Given Charles Schwab’s higher probable upside, analysts clearly believe Charles Schwab is more favorable than China Finance Online.

Earnings & Valuation

This table compares China Finance Online and Charles Schwab’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Finance Online $45.48 million 0.53 -$19.95 million N/A N/A
Charles Schwab $10.13 billion 5.84 $3.51 billion $2.45 18.10

Charles Schwab has higher revenue and earnings than China Finance Online.

Dividends

Charles Schwab pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. China Finance Online does not pay a dividend. Charles Schwab pays out 27.8% of its earnings in the form of a dividend. Charles Schwab has increased its dividend for 3 consecutive years.

Summary

Charles Schwab beats China Finance Online on 11 of the 14 factors compared between the two stocks.

About China Finance Online

China Finance Online Co. Limited provides Web-based financial services in the People’s Republic of China and Hong Kong. The company operates through three segments: Commodities Brokerage Services; Online Financial Information and Advisory Service, and Other Related Services; and Hong Kong Brokerage Services. It provides online access to securities and commodities trading services, wealth management products, and securities investment advisory services to retail investors; and financial database and analytics to institutional investors, including financial, research, academic, and regulatory institutions, as well as financial software products. The company is involved in the operation of Yinglibao, an Internet-based financial platform that integrates wealth management solutions and mutual fund distribution; JRJ mobile app for financial information, securities trading, investment advisory, and wealth management; jrj.com.cn to provide access for wealth management solutions and mutual fund distribution; and jrj.com, a financial information Website. In addition, it provides commodities brokerage services; securities and futures contracts brokerage and related services to its customers, who invest in stocks listed on Hong Kong Stock Exchanges and Clearing Limited; information services; and insurance brokerage services. The company offers its products and services to individual investors managing their own money; professional investors, such as institutional investors managing large sums of money on behalf of their clients and high net worth individuals; and other financial professionals, including investment bankers, stock analysts and financial reporters, and middle class individuals. China Finance Online Co. Limited has a strategic partnership agreement with CIFCO Futures Co., Ltd. The company was incorporated in 1998 and is based in Beijing, the People’s Republic of China.

About Charles Schwab

The Charles Schwab Corporation, through its subsidiaries, provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company operates through two segments, Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services; equity compensation plan sponsors full-service recordkeeping for stock plans, stock options, restricted stock, performance shares, and stock appreciation rights; and retail investor, retirement plan, and mutual fund clearing services. The Advisor Services segment provides custodial, trading, and support services; and retirement business and corporate brokerage retirement services. This segment provides brokerage accounts with cash management capabilities; third-party mutual funds, as well as proprietary mutual funds, plus mutual fund trading, and clearing services to broker-dealers; and exchange-traded funds (ETFs), including proprietary and third-party ETFs. It also offers advice solutions, such as managed portfolios of proprietary and third-party mutual funds and ETFs, separately managed accounts, customized personal advice for tailored portfolios, and specialized planning and portfolio management. In addition, this segment provides banking products and services, including checking and savings accounts, certificates of deposit, first lien residential real estate mortgage loans, home equity loans and lines of credit, and pledged asset lines; and trust services comprising trust custody services, personal trust reporting services, and administrative trustee services. The company serves individuals and institutional clients in the United States, the Commonwealth of Puerto Rico, England, Hong Kong, Singapore, and Australia. The Charles Schwab Corporation was founded in 1971 and is headquartered in San Francisco, California.



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