Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, discount brokerage Charles Schwab (NYSE: SCHW) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Charles Schwab's business and see what CAPS investors are saying about the stock right now.

Charles Schwab facts

Headquarters (Founded)

San Francisco (1971)

Market Cap

$16.9 billion


Investment banking and brokerage

Trailing-12-Month Revenue

$4.0 billion


CEO Walter Bettinger, II (since 2008)
CFO Joseph Martinetto (since 2007)

Return on Equity (Average, Past 3 Years)


Dividend Yield



E*TRADE Financial (Nasdaq: ETFC)
Raymond James (NYSE: RJF)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 94% of the 825 members who have rated Charles Schwab believe the stock will outperform the S&P 500 going forward. These bulls include All-Star meecho, who is ranked in the top 15% of our community, and tekennedy.

In May, meecho touched on the tailwinds working in Charles Schwab's favor: "Interest rates have nowhere else to go but up. The worst is over for [Charles Schwab]. Massive asset accumulation and some cost cutting will pay off soon."

As the nation's largest discount brokerage, deriving a big chunk of its business from interest revenue, Charles Schwab remains one of our community's favorite plays on a rising rate environment. While discount brokerages as a whole are highly thought of in CAPS, Charles Schwab's industry-topping fundamentals, coupled with industry-lagging price performance, make it a particularly potent pick. Despite sporting a higher three-year average ROIC than E*TRADE, AMERITRADE, and Raymond James, Charles Schwab's shares have underperformed each of those rivals by an average of 11 percentage points over the past six months.

CAPS member tekennedy elaborates:

Their profitability is tied to interest rates, market levels and overall growth of their assets under management/active funds. ... The company's valuation is amazing for long term investors due to these temporary factors: assuming an interest spread of 3% over the cycle (which is below the 4.6% earned in 2007) the company's EPS would be around $1.10, giving a P/E of under 13.

Future growth should remain impressive from every segment. Growth in accounts should grow on all fronts: the RIA (advisor) segment is a fast growing industry segment overall, brokerage accounts and retirement accounts should continue to grow due to the value offered by the company's offering. Overall growth should be led by their banking operations however, as penetration among clients has room to grow. ... Considering growth prospects this company should easily outperform the market as a whole.

What do you think about Charles Schwab, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Charles Schwab is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.