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Nov. 23, 2019, 12:56 p.m. EST

Here’s how Charles Schwab and TD Ameritrade stack up amid reports of a blockbuster discount-brokerage merger

Deal could be announced as early as today: reports

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By Mark DeCambre, MarketWatch


Bloomberg
Brokerage bonds

Charles Schwab Corp. is reportedly in talks to acquire TD Ameritrade Holding Corp. in a monster deal that could send ripples throughout the brokerage world as the two biggest discount brokers attempt to combine.

The deal, first reported by CNBC , could be announced as soon as later Thursday and would create a brokerage giant boasting some $5 trillion in assets under management. A hookup between the companies also would come amid a period of intense competition in the business that saw discount brokerages a few months ago slash their commissions on basic accounts to zero.

Here’s how Schwab /zigman2/quotes/201281754/composite SCHW -0.34% and TD Ameritrade /zigman2/quotes/207561492/composite AMTD -0.24% , which is 40% owned by TD Bank, match up:

Difference Charles Schwab TD Ameritrade
Market value $57.5 billion $22.4 billion
Ranking among discount by assets No. 1 No. 2
CEO Walter W. Bettinger II (since 2008) Tim Hockey (since 2016)
Traded publicly 1987 1997 (as Ameritrade Holding Corp.)
Founded 1974 1975
Founder Charles Schwab Joe Ricketts
Assets under management $3.85 trillion $1.3 trillion
Headquarters San Francisco Omaha, Neb.
Employees 19,500 9,226 (as of 2018)
Share price $44.75 (as of Wednesday’s close) $41.38 (as of Wednesday’s close)
YTD stock performance 7.75% -15.48%

The potential deal between Schwab and TD Ameritrade comes as Schwab began offering clients no-fee trading on equities, exchange-traded funds and options on Oct. 7, igniting a furious race to the bottom on fees for some of the nation’s most prominent discount brokers.

Read: Here’s why the biggest wealth managers have an advantage

Rivals E-Trade Financial Corp. /zigman2/quotes/205731930/composite ETFC +1.13% and the brokerage arm of asset management giant Fidelity Investments followed suit in offering zero-commission trades.

Interactive Brokers Corp. /zigman2/quotes/208880397/composite IBKR +2.81%  had announced its commission-free trading product a week before, while the privately held startup Robinhood Markets Inc. had made a name for itself offering no-fee trades since 2014.

The prospective merger between TD Ameritrade and Schwab also comes after Hockey, back in July, announced that he was leaving the company February 2020. “I believe TD Ameritrade is well-positioned to continue as an industry leader and innovator, and until my last day, 100% of my energy will be focused on helping our associates drive our strategy forward,” said at the time.

Read : Charles Schwab on no-commission trading: ‘Wall Street would never have done this’

/zigman2/quotes/201281754/composite
US : U.S.: NYSE
$ 34.84
-0.12 -0.34%
Volume: 9.00M
Aug. 12, 2020 4:00p
P/E Ratio
14.61
Dividend Yield
2.07%
Market Cap
$45.01 billion
Rev. per Employee
$563,538
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/zigman2/quotes/207561492/composite
US : U.S.: Nasdaq
$ 37.71
-0.09 -0.24%
Volume: 2.55M
Aug. 12, 2020 4:00p
P/E Ratio
10.56
Dividend Yield
3.29%
Market Cap
$20.45 billion
Rev. per Employee
$621,366
loading...
/zigman2/quotes/205731930/composite
US : U.S.: Nasdaq
$ 54.45
+0.61 +1.13%
Volume: 2.05M
Aug. 12, 2020 4:00p
P/E Ratio
15.80
Dividend Yield
1.03%
Market Cap
$11.90 billion
Rev. per Employee
$761,500
loading...
/zigman2/quotes/208880397/composite
US : U.S.: Nasdaq
$ 51.18
+1.40 +2.81%
Volume: 371,545
Aug. 12, 2020 4:00p
P/E Ratio
25.12
Dividend Yield
0.78%
Market Cap
$20.68 billion
Rev. per Employee
$1.69M
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Mark DeCambre is MarketWatch's markets editor. He is based in New York. Follow him on Twitter @mdecambre.

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