HSBC (NYSE:HSBC) & Its Peers Critical Contrast

HSBC (NYSE: HSBC) is one of 292 publicly-traded companies in the “Banks” industry, but how does it compare to its rivals? We will compare HSBC to similar businesses based on the strength of its risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Volatility and Risk

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

Institutional & Insider Ownership

2.2% of HSBC shares are held by institutional investors. Comparatively, 52.0% 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 large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for HSBC and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HSBC 1 4 4 0 2.33
HSBC Competitors 2357 8416 8359 359 2.34

HSBC presently has a consensus target price of $9.00, indicating a potential downside of 83.59%. As a group, “Banks” companies have a potential downside of 11.75%. Given HSBC’s rivals stronger consensus rating and higher probable upside, analysts clearly believe HSBC has less favorable growth aspects than its rivals.

Profitability

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

Net Margins Return on Equity Return on Assets
HSBC N/A 4.13% 0.32%
HSBC Competitors 18.54% 8.21% 0.93%

Dividends

HSBC pays an annual dividend of $2.05 per share and has a dividend yield of 3.7%. HSBC pays out 146.4% 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 1.9% and pay out 35.5% of their earnings in the form of a dividend. HSBC has raised its dividend for 4 consecutive years.

Valuation and Earnings

This table compares HSBC and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
HSBC $50.32 billion $2.48 billion 39.16
HSBC Competitors $5.70 billion $854.59 million 423.64

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

Summary

HSBC rivals 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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