First of all, Charles Schwab's dividend payout ratio is 22.7%, which isn't excessive at all (for me, the alarm bells go off when the payout ratio starts to approach 50%). The answer is definitely yes, for a number of reasons.
Still, cautious investors might wonder whether Schwab's dividends are sustainable. The company has been a dividend grower for at least 14 years and features a trailing dividend yield of 1.45% (and a 1.6% forward dividend yield). This is certainly a positive sign to quote Charles Schwab himself, 'This dividend increase reflects the Board’s confidence in our ability to continue to grow earnings and cash flow.' For one thing, income-focused folks should be glad to know that, earlier this year, Schwab declared a 14% increase in its quarterly dividend payments. There are a number of reasons why Charles Schwab should appeal to investors right now. Hence, if short-term traders choose to sell their SCHW shares, value seekers can consider picking up those same shares at a delightful discount.
This isn't a speculative little bank that's likely to go out of business tomorrow or next week. Furthermore, Fortune magazine has recognized Charles Schwab as one of its 50 World's Most Admired Companies for six years in a row.
