Comprehensive Stock Comparison
Compare Morgan Stanley (MS) 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 | MS | 16.8% revenue growth vs SCHW's 1.9% |
| Value | MS | Lower P/E (14.8x vs 16.2x), PEG 1.66 vs 7.08 |
| Quality / Margins | SCHW | 22.9% net margin vs MS's 13.0% |
| Stability / Safety | SCHW | Beta 0.88 vs MS's 1.35, lower leverage |
| Dividends | MS | 2.3% yield, 11-year raise streak, vs SCHW's 1.3% |
| Momentum (1Y) | MS | +28.0% vs SCHW's +21.1% |
| Efficiency (ROA) | SCHW | 232.8% ROA vs MS's 1.2%, ROIC 6.0% vs 2.9% |
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
Morgan Stanley is a global investment bank and wealth management firm that provides financial services to institutions, corporations, and individuals. It generates revenue primarily through investment banking fees (~30%), wealth management fees (~40%), and trading & sales activities (~25%), with the remainder from investment management. The company's competitive advantage lies in its elite brand reputation, global institutional relationships, and integrated platform that connects investment banking with wealth management.
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
SCHW leads in 3 of 6 categories (Financial Metrics, Profitability & Efficiency). MS leads in 3 (Valuation Metrics, Total Returns).
Financial Metrics (TTM)
MS is the larger business by revenue, generating $103.1B annually — 4.0x SCHW's $26.0B. SCHW is the more profitable business, keeping 22.9% of every revenue dollar as net income compared to MS's 13.0%.
| Metric | MSMorgan Stanley | SCHWThe Charles Schwa… |
|---|---|---|
| RevenueTrailing 12 months | $103.1B | $26.0B |
| EBITDAEarnings before interest/tax | $26.3B | $12.8B |
| Net IncomeAfter-tax profit | $16.2B | $8.9B |
| Free Cash FlowCash after capex | -$6.7B | $9.7B |
| Gross MarginGross profit ÷ Revenue | +55.6% | +75.4% |
| Operating MarginEBIT ÷ Revenue | +17.1% | +29.6% |
| Net MarginNet income ÷ Revenue | +13.0% | +22.9% |
| FCF MarginFCF ÷ Revenue | -2.0% | +7.9% |
| Rev. Growth (YoY)Latest quarter vs prior year | — | — |
| EPS Growth (YoY)Latest quarter vs prior year | +48.9% | +41.5% |
Valuation Metrics
At 20.9x trailing earnings, MS trades at a 34% valuation discount to SCHW's 31.8x P/E. Adjusting for growth (PEG ratio), MS offers better value at 2.35x vs SCHW's 13.91x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | MSMorgan Stanley | SCHWThe Charles Schwa… |
|---|---|---|
| Market CapShares × price | $264.9B | $169.2B |
| Enterprise ValueMkt cap + debt − cash | $549.6B | $172.2B |
| Trailing P/EPrice ÷ TTM EPS | 20.94x | 31.84x |
| Forward P/EPrice ÷ next-FY EPS est. | 14.79x | 16.22x |
| PEG RatioP/E ÷ EPS growth rate | 2.35x | 13.91x |
| EV / EBITDAEnterprise value multiple | 24.15x | 18.87x |
| Price / SalesMarket cap ÷ Revenue | 2.57x | 6.51x |
| Price / BookPrice ÷ Book value/share | 2.54x | 3.61x |
| Price / FCFMarket cap ÷ FCF | — | 82.52x |
Profitability & Efficiency
SCHW delivers a 2.9% return on equity — every $100 of shareholder capital generates $3 in annual profit, vs $15 for MS. SCHW carries lower financial leverage with a 0.93x debt-to-equity ratio, signaling a more conservative balance sheet compared to MS's 3.42x. On the Piotroski fundamental quality scale (0–9), SCHW scores 7/9 vs MS's 5/9, reflecting strong financial health.
| Metric | MSMorgan Stanley | SCHWThe Charles Schwa… |
|---|---|---|
| ROE (TTM)Return on equity | +14.6% | +2.9% |
| ROA (TTM)Return on assets | +1.2% | +2.3% |
| ROICReturn on invested capital | +2.9% | +6.0% |
| ROCEReturn on capital employed | +3.8% | +9.5% |
| Piotroski ScoreFundamental quality 0–9 | 5 | 7 |
| Debt / EquityFinancial leverage | 3.42x | 0.93x |
| Net DebtTotal debt minus cash | $284.7B | $3.1B |
| Cash & Equiv.Liquid assets | $75.7B | $42.1B |
| Total DebtShort + long-term debt | $360.5B | $45.1B |
| Interest CoverageEBIT ÷ Interest expense | 0.44x | 3.05x |
Total Returns (with DRIP)
A $10,000 investment in MS five years ago would be worth $23,095 today (with dividends reinvested), compared to $15,597 for SCHW. Over the past 12 months, MS leads with a +28.0% total return vs SCHW's +21.1%. The 3-year compound annual growth rate (CAGR) favors MS at 22.5% vs SCHW's 8.1% — a key indicator of consistent wealth creation.
| Metric | MSMorgan Stanley | SCHWThe Charles Schwa… |
|---|---|---|
| YTD ReturnYear-to-date | -7.9% | -6.0% |
| 1-Year ReturnPast 12 months | +28.0% | +21.1% |
| 3-Year ReturnCumulative with dividends | +83.8% | +26.2% |
| 5-Year ReturnCumulative with dividends | +131.0% | +56.0% |
| 10-Year ReturnCumulative with dividends | +662.8% | +309.4% |
| CAGR (3Y)Annualised 3-year return | +22.5% | +8.1% |
Risk & Volatility
SCHW is the less volatile stock with a 0.88 beta — it tends to amplify market swings less than MS's 1.35 beta. A beta below 1.0 means the stock typically moves less than the S&P 500.
| Metric | MSMorgan Stanley | SCHWThe Charles Schwa… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.35x | 0.88x |
| 52-Week HighHighest price in past year | $192.68 | $107.50 |
| 52-Week LowLowest price in past year | $94.33 | $65.88 |
| % of 52W HighCurrent price vs 52-week peak | +86.4% | +88.6% |
| RSI (14)Momentum oscillator 0–100 | 51.2 | 48.7 |
| Avg Volume (50D)Average daily shares traded | 5.8M | 9.0M |
Analyst Outlook
Wall Street rates MS as "Buy" and SCHW as "Buy". Consensus price targets imply 29.0% upside for SCHW (target: $123) vs 17.7% for MS (target: $196). For income investors, MS offers the higher dividend yield at 2.29% vs SCHW's 1.30%.
| Metric | MSMorgan Stanley | SCHWThe Charles Schwa… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $196.00 | $122.78 |
| # AnalystsCovering analysts | 50 | 50 |
| Dividend YieldAnnual dividend ÷ price | +2.3% | +1.3% |
| Dividend StreakConsecutive years of raises | 11 | 0 |
| Dividend / ShareAnnual DPS | $3.81 | $1.24 |
| Buyback YieldShare repurchases ÷ mkt cap | +1.6% | 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 |
|---|---|---|---|
| Morgan Stanley (MS) | 100 | 398.24 | +298.2% |
| The Charles Schwab … (SCHW) | 100 | 250.52 | +150.5% |
Morgan Stanley (MS) returned +131% over 5 years vs The Charles Schwab … (SCHW)'s +56%. A $10,000 investment in MS 5 years ago would be worth $23,095 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2015 | 2024 | Change |
|---|---|---|---|
| Morgan Stanley (MS) | $36.0B | $103.1B | +186.5% |
| The Charles Schwab … (SCHW) | $6.5B | $26.0B | +299.9% |
Morgan Stanley's revenue grew from $36.0B (2015) to $103.1B (2024) — a 12.4% CAGR. The Charles Schwab Corporation's revenue grew from $6.5B (2015) to $26.0B (2024) — a 16.7% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2015 | 2024 | Change |
|---|---|---|---|
| Morgan Stanley (MS) | 17.0% | 13.0% | -23.7% |
| The Charles Schwab … (SCHW) | 22.3% | 22.9% | +2.7% |
Morgan Stanley's net margin went from 17% (2015) to 13% (2024). The Charles Schwab Corporation's net margin went from 22% (2015) to 23% (2024).
Chart 4P/E Ratio History — 8 Years
| Stock | 2017 | 2024 | Change |
|---|---|---|---|
| Morgan Stanley (MS) | 17 | 15.8 | -7.1% |
| The Charles Schwab … (SCHW) | 31.9 | 24.8 | -22.3% |
Morgan Stanley has traded in a 8x–18x P/E range over 8 years; current trailing P/E is ~21x. 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 | 2015 | 2024 | Change |
|---|---|---|---|
| Morgan Stanley (MS) | 2.91 | 7.95 | +173.2% |
| The Charles Schwab … (SCHW) | 1.03 | 2.99 | +190.3% |
Morgan Stanley's EPS grew from $2.91 (2015) to $7.95 (2024) — a 12% CAGR. The Charles Schwab Corporation's EPS grew from $1.03 (2015) to $2.99 (2024) — a 13% CAGR.
Chart 6Free Cash Flow — 5 Years
Morgan Stanley generated $-2B FCF in 2024 (-107% vs 2021). The Charles Schwab Corporation generated $2B FCF in 2024 (+71% vs 2021).
MS vs SCHW: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is MS or SCHW a better buy right now?
Morgan Stanley (MS) offers the better valuation at 20.9x trailing P/E (14.8x forward), making it the more compelling value choice. Analysts rate Morgan Stanley (MS) a "Buy" — based on 50 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 — MS or SCHW?
On trailing P/E, Morgan Stanley (MS) is the cheapest at 20.9x versus The Charles Schwab Corporation at 31.8x. On forward P/E, Morgan Stanley is actually cheaper at 14.8x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Morgan Stanley wins at 1.66x versus The Charles Schwab Corporation's 7.08x — a reasonable growth-adjusted valuation.
03Which is the better long-term investment — MS or SCHW?
Over the past 5 years, Morgan Stanley (MS) delivered a total return of +131.0%, compared to +56.0% for The Charles Schwab Corporation (SCHW). A $10,000 investment in MS five years ago would be worth approximately $23K today (assuming dividends reinvested). Over 10 years, the gap is even starker: MS returned +662.8% 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 — MS or SCHW?
By beta (market sensitivity over 5 years), The Charles Schwab Corporation (SCHW) is the lower-risk stock at 0.88β versus Morgan Stanley's 1.35β — meaning MS is approximately 54% more volatile than SCHW relative to the S&P 500. On balance sheet safety, The Charles Schwab Corporation (SCHW) carries a lower debt/equity ratio of 93% versus 3% for Morgan Stanley — giving it more financial flexibility in a downturn.
05Which has better profit margins — MS or SCHW?
The Charles Schwab Corporation (SCHW) is the more profitable company, earning 22.9% net margin versus 13.0% for Morgan Stanley — 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 17.1% for MS. 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 MS 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, Morgan Stanley (MS) is the more undervalued stock at a PEG of 1.66x versus The Charles Schwab Corporation's 7.08x. Both stocks trade at elevated growth-adjusted valuations, so expected growth needs to materialise. On forward earnings alone, Morgan Stanley (MS) trades at 14.8x forward P/E versus 16.2x for The Charles Schwab Corporation — 1.4x 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 — MS or SCHW?
All stocks in this comparison pay dividends. Morgan Stanley (MS) offers the highest yield at 2.3%, versus 1.3% for The Charles Schwab Corporation (SCHW).
08Is MS or SCHW better for a retirement portfolio?
For long-horizon retirement investors, The Charles Schwab Corporation (SCHW) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.88), 1.3% yield, +309.4% 10Y return). Both have compounded well over 10 years (SCHW: +309.4%, MS: +662.8%), 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 MS 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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