TD Ameritrade's (AMTD) leadership team highlighted some powerful growth drivers for its business -- and its stock -- during its fourth-quarter earnings call. Here's the information investors won't want to miss.

1. Scottrade integration is progressing well

We introduced millions of Scottrade clients to a richer digital experience, and we introduced millions of TD Ameritrade clients to a more accessible branch network, with hundreds of new locations to choose from across the country.

-- CEO Timothy Hockey

In 2016, TD Ameritrade reached an agreement to acquire Scottrade's brokerage business for $2.7 billion. The deal helped to quadruple the number of TD Ameritrade branches and added 4 million clients to its customer base. The combined company now stands as a titan within its industry, with more than 11 million client accounts totaling approximately $1.3 trillion in assets.

2. TD Ameritrade is gaining share despite not having the lowest commissions

We're very comfortable with our growth rate. We had literally 46% growth year over year in our high-value funded accounts, new to the firm last year. So even with our higher price point on commission rates, we're still very attractive in the marketplace.

-- Hockey

Despite its immense scale, TD Ameritrade is not the low-cost provider in the brokerage industry. Fellow industry giants Fidelity and Charles Schwab (SCHW -0.92%) currently charge lower commissions at $4.95 per stock trade, compared to $6.95 for TD Ameritrade. And Interactive Brokers (IBKR 0.46%) -- another powerful force within the brokerage arena -- offers a pricing structure in which commissions are often as low as $1 per trade.

Some competitors even offer zero-fee products and services. Fidelity is aggressively marketing its new zero-expense-ratio mutual funds. JPMorgan Chase (JPM -1.21%) recently announced a zero-commission trading service. And upstart Robinhood is making waves with its commission-free business model.

Yet despite these competitive pressures, TD Ameritrade continues to enjoy tremendous account growth. Rather than compete simply on price, TD Ameritrade places a strong emphasis on technology, research, and customer service. It's a model that appears to be resonating with investors, and it gives TD Ameritrade a higher degree of pricing power than its rivals.

A person pointing to an upward-sloping chart

TD Ameritrade's client accounts continue to grow at a rapid clip. Image source: Getty Images.

3. Investment firms are a powerful growth driver

Growth within the institutional channel remains quite impressive. We saw growth coming from all advisor segments -- new, existing, and breakaway -- with activity from new breakaway brokers coming in particularly strong.

-- Hockey

In addition to individual investors, TD Ameritrade is enjoying strong expansion in its institutional client base. The company is benefiting from trends within the wealth management industry, which is seeing assets migrate from commission-based brokers to fee-based registered investment advisors (RIAs). TD Ameritrade has positioned itself as a trusted custodian and service provider for these investment firms. More than 6,000 RIAs use TD Ameritrade's highly regarded technology platform and trading services -- a figure that's likely to continue to rise in the coming years.

4. Stock-market highs are good for business...

Total client trades in the fourth quarter averaged 795,000 per day. Activity slowed a bit in the first half of the period as volatility came off in the market. But we saw a resurgence in the second half as both the Dow and S&P [500] were on their way to hitting record highs. This continued engagement made for a strong year in trading, with client trades averaging a record 811,000 per day in fiscal 2018, and that engagement has not abated.

-- Hockey

When the markets hit new highs, investors tend to get excited -- and so does TD Ameritrade. During these euphoric times, capital typically flows into the market as more investors place more trades. The most brazen of these investors also use higher levels of margin in order to buy more stock with these borrowed funds. In turn, TD Ameritrade often enjoys higher commission and margin lending income as the markets reach new record levels.

5. ...but so is volatility

October month-to-date, we are averaging 966,000 trades per day, reflecting a resurgence in volatility amid recent market corrections, which not only tends to bring out equity traders but derivative traders as well.

-- Hockey

In addition to the good times, periods of heightened market volatility also tend to boost TD Ameritrade's results. When prices fall precipitously, fearful traders sell in order to protect gains, while opportunistic investors buy the dip. Market declines can also bring more short-sellers into the market, and they tend to be more active as prices are falling. All of this leads to higher trading volumes and commissions.

6. Higher rates = higher profits

Our new rate sensitivity for the next 25-basis-point Fed funds increase is $70 million to $95 million in pre-tax income.

-- CFO Stephen Boyle

Many businesses suffer when interest rates rise, which can increase a variety of costs. TD Ameritrade, however, is one of a select few businesses that benefit from higher rates. It earns higher interest income on its client account balances, and its margin loans also tend to be more profitable. So an investment in TD Ameritrade can provide a bit of a hedge against rising rates in an investor's portfolio.

7. Shareholders should continue to benefit from bountiful capital returns

Regarding capital deployment, we returned 72% of non-GAAP net income in the quarter and 38% for the year. In the quarter, we paid $119 million in dividends. We also implemented a stock-repurchase program resulting in 4.6 million shares being purchased for $255 million.

-- CFO Stephen Boyle

All told, TD Ameritrade's net income surged 69% in fiscal 2018, to $1.47 billion. Moreover, its capital-light business model allows the company to return a significant portion of its free cash flow to investors via dividends and stock buybacks.

Better still, TD Ameritrade's rising profits gave management the confidence to boost its quarterly cash payout by 43%. And with multiple growth drivers fueling its results, investors can expect more dividend increases in the years ahead.