Head to Head Analysis: HSBC (HSBC) and The Competition

HSBC (NYSE: HSBC) is one of 313 public companies in the “Banks” industry, but how does it weigh in compared to its peers? We will compare HSBC to similar companies based on the strength of its dividends, profitability, earnings, institutional ownership, risk, valuation and analyst recommendations.

Profitability

This table compares HSBC and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HSBC 1.42% 4.13% 0.32%
HSBC Competitors 18.69% 8.26% 0.93%

Analyst Ratings

This is a breakdown of current ratings for HSBC and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HSBC 1 4 4 0 2.33
HSBC Competitors 2212 8635 8602 345 2.36

HSBC presently has a consensus price target of $9.00, suggesting a potential downside of 82.57%. As a group, “Banks” companies have a potential downside of 7.22%. Given HSBC’s peers stronger consensus rating and higher probable upside, analysts plainly believe HSBC has less favorable growth aspects than its peers.

Earnings & Valuation

This table compares HSBC and its peers top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
HSBC $50.32 billion $2.48 billion 36.89
HSBC Competitors $5.50 billion $827.87 million 389.01

HSBC has higher revenue and earnings than its peers. HSBC is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Risk & Volatility

HSBC has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, HSBC’s peers have a beta of 0.79, indicating that their average stock price is 21% less volatile than the S&P 500.

Dividends

HSBC pays an annual dividend of $2.00 per share and has a dividend yield of 3.9%. HSBC pays out 142.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Banks” companies pay a dividend yield of 2.0% and pay out 35.5% of their earnings in the form of a dividend. HSBC has raised its dividend for 3 consecutive years.

Insider and Institutional Ownership

2.2% of HSBC shares are held by institutional investors. Comparatively, 52.1% of shares of all “Banks” companies are held by institutional investors. 10.4% of shares of all “Banks” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

HSBC peers beat HSBC on 10 of the 15 factors compared.

About HSBC

HSBC Holdings plc (HSBC) is the banking and financial services company. The Company manages its products and services through four businesses: Retail Banking and Wealth Management (RBWM), Commercial Banking (CMB), Global Banking and Markets (GB&M), and Global Private Banking (GPB). It operates across various geographical regions, which include Europe, Asia, Middle East and North Africa, North America and Latin America. RBWM business offers Retail Banking, Wealth Management, Asset Management and Insurance. CMB services include working capital, term loans, payment services and international trade facilitation, among other services, as well as expertise in mergers and acquisitions, and access to financial markets. GB&M supports government, corporate and institutional clients across the world. GPB’s products and services include Investment Management, Private Wealth Solutions, and a range of Private Banking services.

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