Head to Head Comparison: Bank of N.T. Butterfield & Son (NYSE:NTB) vs. HSBC (NYSE:HSBC)

HSBC (NYSE:HSBC) and Bank of N.T. Butterfield & Son (NYSE:NTB) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.

Institutional and Insider Ownership

1.5% of HSBC shares are owned by institutional investors. Comparatively, 62.7% of Bank of N.T. Butterfield & Son shares are owned by institutional investors. 0.0% of HSBC shares are owned by company insiders. Comparatively, 1.2% of Bank of N.T. Butterfield & Son shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

HSBC has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, Bank of N.T. Butterfield & Son has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Dividends

HSBC pays an annual dividend of $8.98 per share and has a dividend yield of 11.3%. Bank of N.T. Butterfield & Son pays an annual dividend of $2.00 per share and has a dividend yield of 3.9%. HSBC pays out 148.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bank of N.T. Butterfield & Son pays out 36.5% of its earnings in the form of a dividend.

Profitability

This table compares HSBC and Bank of N.T. Butterfield & Son’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HSBC	16.07%	13.10%	0.82%
Bank of N.T. Butterfield & Son	29.00%	21.72%	1.68%

Analyst Ratings

This is a summary of recent recommendations and price targets for HSBC and Bank of N.T. Butterfield & Son, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HSBC	0	3	6	0	2.67
Bank of N.T. Butterfield & Son	0	2	2	1	2.80

HSBC currently has a consensus target price of $63.00, suggesting a potential downside of 20.49%. Bank of N.T. Butterfield & Son has a consensus target price of $55.00, suggesting a potential upside of 6.67%. Given Bank of N.T. Butterfield & Son’s stronger consensus rating and higher possible upside, analysts clearly believe Bank of N.T. Butterfield & Son is more favorable than HSBC.

Earnings & Valuation

This table compares HSBC and Bank of N.T. Butterfield & Son”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HSBC	$66.22 billion	4.11	$22.29 billion	$6.05	13.10
Bank of N.T. Butterfield & Son	$800.02 million	2.70	$231.94 million	$5.48	9.41

HSBC has higher revenue and earnings than Bank of N.T. Butterfield & Son. Bank of N.T. Butterfield & Son is trading at a lower price-to-earnings ratio than HSBC, indicating that it is currently the more affordable of the two stocks.

Summary

Bank of N.T. Butterfield & Son beats HSBC on 10 of the 17 factors compared between the two stocks.

About HSBC

HSBC Holdings plc provides banking and financial services worldwide. The company operates through Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets segments. The Wealth and Personal Banking segment offers retail banking and wealth products, including current and savings accounts, mortgages and personal loans, credit and debit cards, and local and international payment services; and wealth management services comprising insurance and investment products, global asset management services, investment management, and private wealth solutions. This segment serves personal banking and high net worth individuals. The Commercial Banking segment provides credit and lending, treasury management, payment, cash management, commercial insurance, and investment services; commercial cards; international trade and receivables finance services; foreign exchange products; capital raising services on debt and equity markets; and advisory services. It serves small and medium sized enterprises, mid-market enterprises, and corporates. The Global Banking and Markets segment offers financing, advisory, and transaction services; and credit, rates, foreign exchange, equities, money markets, and securities services; and engages in principal investment activities. It serves government, corporate and institutional clients, and private investors. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.

About Bank of N.T. Butterfield & Son

The Bank of N.T. Butterfield & Son Ltd. provides community banking and wealth management business. The firm operates through the following geographical segments: Bermuda, the Cayman Islands, Channel Islands and the UK, and Other. The Bermuda and Cayman segments offer retail banking and wealth management. The Channel Islands and the UK segment refers to the retail and corporate banking and wealth management. The Other segment includes operations in the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland. The company was founded in 1858 and is headquartered in Hamilton, Bermuda.