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Schwab's Liquidity Cushion: Does it Make Capital Returns Sustainable?
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Key Takeaways
Charles Schwab reported $32.2B in cash and cash equivalents as of June 30, 2025.
SCHW authorized a new $20B share repurchase program in July, replacing its prior plan.
The company raised its dividend by 8% in January and targets a 20-30% payout ratio.
Charles Schwab (SCHW - Free Report) enjoys a strong liquidity position and remains focused on maintaining a low-cost capital structure. As of June 30, 2025, cash and cash equivalents were $32.2 billion. As of the same date, total debt was $37.7 billion.
Moreover, SCHW maintains investment-grade long-term credit ratings of A2, A- and A from Moody’s, S&P Global Ratings and Fitch Ratings, respectively, and a stable outlook. These ratings indicate a strong financial position with low credit risk. This, along with Schwab’s resilient earnings and strong fundamentals, supports robust capital returns.
Hence, in July, the company announced a new share repurchase program, authorizing $20 billion. This replaced the prior plan (which had almost $6.9 billion remaining as of June 30, 2025) and reflects confidence in the company’s financial momentum and long-term prospects.
Further, in January 2025, Schwab raised its quarterly dividend by 8% to 27 cents per share. In the past five years, the company has increased its dividends four times at an annualized growth rate of 10.62%. Further, SCHW has a dividend payout ratio of 27%, which is within its target of 20-30% of GAAP earnings.
With robust liquidity, a strong capital base and earnings strength, Schwab is well-positioned to sustain higher dividends and aggressive share repurchases.
How is Schwab Placed in Capital Returns Compared With Peers?
Interactive Brokers has been consistent with its dividend payment for a long time. In April, it announced a 28% jump in quarterly dividend to 25 cents per share. This followed a whopping 150% surge in dividends announced in April 2024. In the past five years, the company increased its dividends twice at an annualized growth rate of 24.71%.
Also, it implemented a four-for-one forward split of its common stock in June 2025 to make shares more accessible to investors. Interactive Brokers uses insignificant debt to finance its operations. Thus, given a solid liquidity position, the company is expected to be able to sustain its dividend payments in the future, thus enhancing shareholder value.
Meanwhile, Robinhood doesn’t pay dividends. The company has a share repurchase plan in place. In May 2024, it announced a share repurchase program worth up to $1 billion. In April 2025, Robinhood authorized the buyback of an additional $500 million worth of shares under the plan.
As of June 30, 2025, nearly $797 million worth of shares remained available for repurchase. Given a decent liquidity and balance sheet position, Robinhood’s share buybacks will likely be sustainable.
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Schwab's Liquidity Cushion: Does it Make Capital Returns Sustainable?
Key Takeaways
Charles Schwab (SCHW - Free Report) enjoys a strong liquidity position and remains focused on maintaining a low-cost capital structure. As of June 30, 2025, cash and cash equivalents were $32.2 billion. As of the same date, total debt was $37.7 billion.
Moreover, SCHW maintains investment-grade long-term credit ratings of A2, A- and A from Moody’s, S&P Global Ratings and Fitch Ratings, respectively, and a stable outlook. These ratings indicate a strong financial position with low credit risk. This, along with Schwab’s resilient earnings and strong fundamentals, supports robust capital returns.
Hence, in July, the company announced a new share repurchase program, authorizing $20 billion. This replaced the prior plan (which had almost $6.9 billion remaining as of June 30, 2025) and reflects confidence in the company’s financial momentum and long-term prospects.
Further, in January 2025, Schwab raised its quarterly dividend by 8% to 27 cents per share. In the past five years, the company has increased its dividends four times at an annualized growth rate of 10.62%. Further, SCHW has a dividend payout ratio of 27%, which is within its target of 20-30% of GAAP earnings.
With robust liquidity, a strong capital base and earnings strength, Schwab is well-positioned to sustain higher dividends and aggressive share repurchases.
How is Schwab Placed in Capital Returns Compared With Peers?
Schwab’s two close peers are Interactive Brokers (IBKR - Free Report) and Robinhood Markets (HOOD - Free Report) .
Interactive Brokers has been consistent with its dividend payment for a long time. In April, it announced a 28% jump in quarterly dividend to 25 cents per share. This followed a whopping 150% surge in dividends announced in April 2024. In the past five years, the company increased its dividends twice at an annualized growth rate of 24.71%.
Also, it implemented a four-for-one forward split of its common stock in June 2025 to make shares more accessible to investors. Interactive Brokers uses insignificant debt to finance its operations. Thus, given a solid liquidity position, the company is expected to be able to sustain its dividend payments in the future, thus enhancing shareholder value.
Meanwhile, Robinhood doesn’t pay dividends. The company has a share repurchase plan in place. In May 2024, it announced a share repurchase program worth up to $1 billion. In April 2025, Robinhood authorized the buyback of an additional $500 million worth of shares under the plan.
As of June 30, 2025, nearly $797 million worth of shares remained available for repurchase. Given a decent liquidity and balance sheet position, Robinhood’s share buybacks will likely be sustainable.