With consolidation expected to occur in the online brokerage industry as interest rates begin to rise, 24/7 Wall St. wanted to see how the major online and discount brokerages now stack up against each other in terms of total client assets, brokerage accounts and current trading activity. This includes E*Trade Financial Corp. (NASDAQ: ETFC) as the most likely to be acquired, if the past rumors have been accurate, with Charles Schwab Corp. (NYSE: SCHW) and TD Ameritrade Holding Corp. (NYSE: AMTD) as the would-be potential acquirers.
This review also includes Interactive Brokers Group Inc. (NASDAQ: IBKR), as it has been aggressive in the past about client acquisitions.
24/7 Wall St. is breaking these companies down individually by market cap and stock information, but we also are looking at items such as daily average revenue trades (DARTs), total client assets, number of brokerage accounts and the like. Each company includes different metrics in its monthly trade data.
E*Trade Financial ended May with 3,198,095 brokerage accounts, a gain of 27,865 gross accounts and up 7,141 net for the month. If you include banking accounts, that was 4,836,090 accounts. May brought in net new brokerage assets of $1 billion and customer security holdings rose 2%, or $3.7 billion. Broker-related cash balances grew $700 million to $42.0 billion, and bank-related cash and deposits rose by $100 million to $5.6 billion. E*Trade’s DARTs of 151,444 were down 4% from April and down 3% from the prior year. Total customer assets were listed as $308 billion, up from $302 billion the prior month and up from $272.1 billion a year earlier.
Shares of E*Trade were trading around $30.75 Monday morning. The stock has a consensus analyst price target of $31.79 and a 52-week trading range of $18.20 to $31.41. E*Trade has a market value of $8.9 billion, and buyout rumors have been around on it since shares were trading at, under and above $10.00.
Charles Schwab showed that it had total client assets at the end of May up 1% from the month of April to $2.57 trillion, up 9% from a year before. The net new assets in the month were $10.1 billion. Schwab also claims more than 325 office branches and 9.6 million active brokerage accounts, as well as 1.5 million corporate retirement plan participants, and 1.0 million banking accounts.
Shares of Schwab around $33.40 Monday morning, in a 52-week trading range of $23.35 to $33.72. The stock has a consensus analyst price target of $34.25. Schwab’s market cap is almost $44 billion.