Charles Schwab (SCHW) VS Ameritrade Holding (AMTD)

If you follow superinvestors transactions, you've probably seen that Charles Schwab is a favorite stock of many superinvestors. Lou Simpson, Lee Ainslie, Bob Goldfarb (Sequoia) Thomas Gayner and François Rochon are some of the good names associated with the stock. 

On the Ameritrade Holding, there's only Chuck Akre. 

But what exactly do these similar companies?

Both offer brokerage services. And Charles Schwab seems to offer some other financial services which are not offered by AMTD. To make it short, both are financial companies. 

Here's a few numbers:

SCHW

Annual EPS Growth last 5 years: 12%

Estimated annual EPS Growth next 5 years: 16% 

Earnings predictabiliy according to Value Line: 85%

Dilution over the last 3 years: 1%

Current PE ratio: 17

Forward PE ratio: 14

Forward PE VS last 5 years historical PE: 50% discount

ROE last 5 years: 12

Beta: 1,2

AMTD

Annual EPS Growth last 5 years: 12%

Estimated annual EPS Growth next 5 years: 18% 

Earnings predictabiliy according to Value Line: 80%

Dilution over the last 3 years: 6%

Current PE ratio: 16

Forward PE ratio: 11

Forward PE VS last 5 years historical PE: 50% discount

ROE last 5 yers: 16

Beta: 1,2

Over the last 12 months, both stocks have beaten the estimates on every quarter. 

So, there's an interesting momentum here. And both stocks are cheap on an historical basis. However, there's a reason for that: their Beta is moderately high and both stocks are sensible to the general state of the economy. 

Both stocks appear interesting but I prefer AMTD. Why? A better ROE, a better growth ahead and a better performance over the last years. 

I prefer stocks with a low Beta, but a little percentage of a portfolio for these stocks wouldn't be a bad idea. They're cheap and highly predictable, two great advantages for a portfolio.