HSBC (HSBC) & Its Competitors Critical Contrast

HSBC (NYSE: HSBC) is one of 308 publicly-traded companies in the “Banks” industry, but how does it weigh in compared to its peers? We will compare HSBC to related businesses based on the strength of its dividends, institutional ownership, earnings, risk, analyst recommendations, profitability and valuation.

Institutional and 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, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

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.

Analyst Ratings

This is a summary of current recommendations and price targets for HSBC and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HSBC 1 5 3 0 2.22
HSBC Competitors 2419 8762 8763 370 2.35

HSBC currently has a consensus price target of $9.00, suggesting a potential downside of 83.61%. As a group, “Banks” companies have a potential downside of 9.14%. Given HSBC’s peers stronger consensus rating and higher possible upside, analysts plainly believe HSBC has less favorable growth aspects than its peers.

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 20.66% 6.62% 0.56%
HSBC Competitors 18.54% 8.24% 0.93%

Dividends

HSBC pays an annual dividend of $2.05 per share and has a dividend yield of 3.7%. HSBC pays out 149.6% 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 34.8% of their earnings in the form of a dividend.

Valuation and Earnings

This table compares HSBC and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
HSBC $50.32 billion $2.48 billion 40.07
HSBC Competitors $5.55 billion $833.70 million 398.56

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.

Summary

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

HSBC Company Profile

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.

Receive News & Ratings for HSBC Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for HSBC and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply