Comprehensive Stock Comparison
Compare Houlihan Lokey, Inc. (HLI) vs The Charles Schwab Corporation (SCHW) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | HLI | 24.8% revenue growth vs SCHW's 1.9% |
| Value | HLI | PEG 1.32 vs 7.08 |
| Quality / Margins | SCHW | 22.9% net margin vs HLI's 16.7% |
| Stability / Safety | SCHW | Beta 0.88 vs HLI's 0.98 |
| Dividends | HLI | 1.5% yield, 7-year raise streak, vs SCHW's 1.3% |
| Momentum (1Y) | SCHW | +21.1% vs HLI's -4.2% |
| Efficiency (ROA) | SCHW | 232.8% ROA vs HLI's 11.4%, ROIC 6.0% vs 15.5% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Houlihan Lokey is a global investment bank specializing in middle-market mergers and acquisitions, financial restructuring, and valuation advisory services. It generates revenue primarily from advisory fees across three segments: Corporate Finance (~60% of revenue), Financial Restructuring (~25%), and Financial and Valuation Advisory (~15%). The firm's key competitive advantage is its dominant market position in middle-market M&A and restructuring—particularly its reputation for fairness opinions and creditor advisory work—which creates deep client relationships and repeat business.
Charles Schwab is a major financial services firm that operates as a discount brokerage, wealth manager, and bank for individual investors and financial advisors. It generates revenue primarily from net interest income on client cash balances (roughly 50%), asset management fees on its proprietary funds and advisory services, and trading commissions. The company's key competitive advantage is its massive scale in client assets—over $8 trillion—which creates a powerful network effect and allows it to offer low-cost services while maintaining profitability.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
HLI leads in 4 of 6 categories (Valuation Metrics, Profitability & Efficiency). SCHW leads in 2 (Financial Metrics, Risk & Volatility).
Financial Metrics (TTM)
SCHW is the larger business by revenue, generating $26.0B annually — 10.9x HLI's $2.4B. SCHW is the more profitable business, keeping 22.9% of every revenue dollar as net income compared to HLI's 16.7%.
| Metric | HLIHoulihan Lokey, I… | SCHWThe Charles Schwa… |
|---|---|---|
| RevenueTrailing 12 months | $2.4B | $26.0B |
| EBITDAEarnings before interest/tax | $591M | $12.8B |
| Net IncomeAfter-tax profit | $448M | $8.9B |
| Free Cash FlowCash after capex | $739M | $9.7B |
| Gross MarginGross profit ÷ Revenue | +38.5% | +75.4% |
| Operating MarginEBIT ÷ Revenue | +21.0% | +29.6% |
| Net MarginNet income ÷ Revenue | +16.7% | +22.9% |
| FCF MarginFCF ÷ Revenue | +33.9% | +7.9% |
| Rev. Growth (YoY)Latest quarter vs prior year | — | — |
| EPS Growth (YoY)Latest quarter vs prior year | +22.3% | +41.5% |
Valuation Metrics
At 28.1x trailing earnings, HLI trades at a 12% valuation discount to SCHW's 31.8x P/E. Adjusting for growth (PEG ratio), HLI offers better value at 1.79x vs SCHW's 13.91x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | HLIHoulihan Lokey, I… | SCHWThe Charles Schwa… |
|---|---|---|
| Market CapShares × price | $2.5B | $169.2B |
| Enterprise ValueMkt cap + debt − cash | $2.0B | $172.2B |
| Trailing P/EPrice ÷ TTM EPS | 28.14x | 31.84x |
| Forward P/EPrice ÷ next-FY EPS est. | 20.78x | 16.22x |
| PEG RatioP/E ÷ EPS growth rate | 1.79x | 13.91x |
| EV / EBITDAEnterprise value multiple | 3.65x | 18.87x |
| Price / SalesMarket cap ÷ Revenue | 1.05x | 6.51x |
| Price / BookPrice ÷ Book value/share | 5.17x | 3.61x |
| Price / FCFMarket cap ÷ FCF | 3.11x | 82.52x |
Profitability & Efficiency
SCHW delivers a 2.9% return on equity — every $100 of shareholder capital generates $3 in annual profit, vs $20 for HLI. HLI carries lower financial leverage with a 0.20x debt-to-equity ratio, signaling a more conservative balance sheet compared to SCHW's 0.93x.
| Metric | HLIHoulihan Lokey, I… | SCHWThe Charles Schwa… |
|---|---|---|
| ROE (TTM)Return on equity | +19.5% | +2.9% |
| ROA (TTM)Return on assets | +11.4% | +2.3% |
| ROICReturn on invested capital | +15.5% | +6.0% |
| ROCEReturn on capital employed | +20.1% | +9.5% |
| Piotroski ScoreFundamental quality 0–9 | 7 | 7 |
| Debt / EquityFinancial leverage | 0.20x | 0.93x |
| Net DebtTotal debt minus cash | -$533M | $3.1B |
| Cash & Equiv.Liquid assets | $971M | $42.1B |
| Total DebtShort + long-term debt | $438M | $45.1B |
| Interest CoverageEBIT ÷ Interest expense | — | 3.05x |
Total Returns (with DRIP)
A $10,000 investment in HLI five years ago would be worth $26,770 today (with dividends reinvested), compared to $15,597 for SCHW. Over the past 12 months, SCHW leads with a +21.1% total return vs HLI's -4.2%. The 3-year compound annual growth rate (CAGR) favors HLI at 21.2% vs SCHW's 8.1% — a key indicator of consistent wealth creation.
| Metric | HLIHoulihan Lokey, I… | SCHWThe Charles Schwa… |
|---|---|---|
| YTD ReturnYear-to-date | -7.1% | -6.0% |
| 1-Year ReturnPast 12 months | -4.2% | +21.1% |
| 3-Year ReturnCumulative with dividends | +78.2% | +26.2% |
| 5-Year ReturnCumulative with dividends | +167.7% | +56.0% |
| 10-Year ReturnCumulative with dividends | +601.0% | +309.4% |
| CAGR (3Y)Annualised 3-year return | +21.2% | +8.1% |
Risk & Volatility
SCHW is the less volatile stock with a 0.88 beta — it tends to amplify market swings less than HLI's 0.98 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. SCHW currently trades 88.6% from its 52-week high vs HLI's 77.3% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | HLIHoulihan Lokey, I… | SCHWThe Charles Schwa… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.98x | 0.88x |
| 52-Week HighHighest price in past year | $211.78 | $107.50 |
| 52-Week LowLowest price in past year | $137.99 | $65.88 |
| % of 52W HighCurrent price vs 52-week peak | +77.3% | +88.6% |
| RSI (14)Momentum oscillator 0–100 | 46.5 | 48.7 |
| Avg Volume (50D)Average daily shares traded | 440K | 9.0M |
Analyst Outlook
Wall Street rates HLI as "Buy" and SCHW as "Buy". Consensus price targets imply 29.0% upside for SCHW (target: $123) vs 25.6% for HLI (target: $206). For income investors, HLI offers the higher dividend yield at 1.47% vs SCHW's 1.30%.
| Metric | HLIHoulihan Lokey, I… | SCHWThe Charles Schwa… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $205.67 | $122.78 |
| # AnalystsCovering analysts | 15 | 50 |
| Dividend YieldAnnual dividend ÷ price | +1.5% | +1.3% |
| Dividend StreakConsecutive years of raises | 7 | 0 |
| Dividend / ShareAnnual DPS | $2.41 | $1.24 |
| Buyback YieldShare repurchases ÷ mkt cap | +2.1% | 0.0% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Houlihan Lokey, Inc. (HLI) | 100 | 313.93 | +213.9% |
| The Charles Schwab … (SCHW) | 100 | 250.52 | +150.5% |
Houlihan Lokey, Inc. (HLI) returned +168% over 5 years vs The Charles Schwab … (SCHW)'s +56%. A $10,000 investment in HLI 5 years ago would be worth $26,770 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Houlihan Lokey, Inc. (HLI) | $694M | $2.4B | +244.4% |
| The Charles Schwab … (SCHW) | $7.6B | $26.0B | +239.9% |
Houlihan Lokey, Inc.'s revenue grew from $694M (2016) to $2.4B (2025) — a 14.7% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Houlihan Lokey, Inc. (HLI) | 10.1% | 16.7% | +66.4% |
| The Charles Schwab … (SCHW) | 24.7% | 22.9% | -7.5% |
Houlihan Lokey, Inc.'s net margin went from 10% (2016) to 17% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Houlihan Lokey, Inc. (HLI) | 27.9 | 29.9 | +7.2% |
| The Charles Schwab … (SCHW) | 31.9 | 24.8 | -22.3% |
Houlihan Lokey, Inc. has traded in a 14x–42x P/E range over 9 years; current trailing P/E is ~28x. The Charles Schwab Corporation has traded in a 17x–32x P/E range over 8 years; current trailing P/E is ~32x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Houlihan Lokey, Inc. (HLI) | 1.1 | 5.82 | +429.1% |
| The Charles Schwab … (SCHW) | 1.31 | 2.99 | +128.2% |
Houlihan Lokey, Inc.'s EPS grew from $1.10 (2016) to $5.82 (2025) — a 20% CAGR.
Chart 6Free Cash Flow — 5 Years
Houlihan Lokey, Inc. generated $809M FCF in 2025 (+43% vs 2021). The Charles Schwab Corporation generated $2B FCF in 2024 (+71% vs 2021).
HLI vs SCHW: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is HLI or SCHW a better buy right now?
Houlihan Lokey, Inc. (HLI) offers the better valuation at 28.1x trailing P/E (20.8x forward), making it the more compelling value choice. Analysts rate Houlihan Lokey, Inc. (HLI) a "Buy" — based on 15 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — HLI or SCHW?
On trailing P/E, Houlihan Lokey, Inc. (HLI) is the cheapest at 28.1x versus The Charles Schwab Corporation at 31.8x. On forward P/E, The Charles Schwab Corporation is actually cheaper at 16.2x — notably different from the trailing picture, reflecting expected earnings growth. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Houlihan Lokey, Inc. wins at 1.32x versus The Charles Schwab Corporation's 7.08x — a reasonable growth-adjusted valuation.
03Which is the better long-term investment — HLI or SCHW?
Over the past 5 years, Houlihan Lokey, Inc. (HLI) delivered a total return of +167.7%, compared to +56.0% for The Charles Schwab Corporation (SCHW). A $10,000 investment in HLI five years ago would be worth approximately $27K today (assuming dividends reinvested). Over 10 years, the gap is even starker: HLI returned +601.0% versus SCHW's +309.4%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — HLI or SCHW?
By beta (market sensitivity over 5 years), The Charles Schwab Corporation (SCHW) is the lower-risk stock at 0.88β versus Houlihan Lokey, Inc.'s 0.98β — meaning HLI is approximately 11% more volatile than SCHW relative to the S&P 500. On balance sheet safety, Houlihan Lokey, Inc. (HLI) carries a lower debt/equity ratio of 20% versus 93% for The Charles Schwab Corporation — giving it more financial flexibility in a downturn.
05Which has better profit margins — HLI or SCHW?
The Charles Schwab Corporation (SCHW) is the more profitable company, earning 22.9% net margin versus 16.7% for Houlihan Lokey, Inc. — meaning it keeps 22.9% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: SCHW leads at 29.6% versus 21.0% for HLI. At the gross margin level — before operating expenses — SCHW leads at 75.4%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is HLI or SCHW more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Houlihan Lokey, Inc. (HLI) is the more undervalued stock at a PEG of 1.32x versus The Charles Schwab Corporation's 7.08x. A PEG below 1.5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, The Charles Schwab Corporation (SCHW) trades at 16.2x forward P/E versus 20.8x for Houlihan Lokey, Inc. — 4.6x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for SCHW: 29.0% to $122.78.
07Which pays a better dividend — HLI or SCHW?
All stocks in this comparison pay dividends. Houlihan Lokey, Inc. (HLI) offers the highest yield at 1.5%, versus 1.3% for The Charles Schwab Corporation (SCHW).
08Is HLI or SCHW better for a retirement portfolio?
For long-horizon retirement investors, Houlihan Lokey, Inc. (HLI) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.98), 1.5% yield, +601.0% 10Y return). Both have compounded well over 10 years (HLI: +601.0%, SCHW: +309.4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between HLI and SCHW?
Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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