Reviewing HSBC (NYSE:HSBC) and Standard Chartered (OTCMKTS:SCBFF)

Standard Chartered (OTCMKTS:SCBFF) and HSBC (NYSE:HSBC) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Valuation and Earnings

This table compares Standard Chartered and HSBC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Standard Chartered	$39.53 billion	1.45	$5.09 billion	$1.88	13.41
HSBC	$131.35 billion	2.36	$22.29 billion	$6.05	14.88

HSBC has higher revenue and earnings than Standard Chartered. Standard Chartered is trading at a lower price-to-earnings ratio than HSBC, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Standard Chartered has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Dividends

Standard Chartered pays an annual dividend of $0.98 per share and has a dividend yield of 3.9%. HSBC pays an annual dividend of $8.98 per share and has a dividend yield of 10.0%. Standard Chartered pays out 52.1% of its earnings in the form of a dividend. 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Standard Chartered and HSBC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Standard Chartered	0	2	3	0	2.60
HSBC	0	4	5	1	2.70

HSBC has a consensus price target of $63.00, suggesting a potential downside of 30.02%. Given HSBC’s stronger consensus rating and higher probable upside, analysts clearly believe HSBC is more favorable than Standard Chartered.

Profitability

This table compares Standard Chartered and HSBC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Standard Chartered	13.63%	11.07%	0.66%
HSBC	16.07%	13.10%	0.82%

Insider and Institutional Ownership

1.5% of HSBC shares are owned by institutional investors. 0.0% of HSBC shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

HSBC beats Standard Chartered on 15 of the 17 factors compared between the two stocks.

About Standard Chartered

Standard Chartered PLC, together with its subsidiaries, provides various banking products and services in Asia, Africa, the Middle East, Europe, and the Americas. The company operates in three segments: Corporate, Commercial & Institutional Banking; Consumer, Private & Business Banking; and Ventures. It offers retail products, such as deposits, mortgages, credit cards, and personal loans; wealth management products and services that include investments, portfolio management, insurance, and wealth advice; and transaction banking services, such as cash management, working capital, and trade financing products. The company provides financial markets products and services that comprise project and export financing; debt capital markets and leveraged financing; financing and securities services; sales and structuring; macro, commodities, and credit trading; and market research services. In addition, it offers digital banking solutions. It serves financial institutions, governments, banks, investors, corporations, small to medium-sized businesses, and individuals. Standard Chartered PLC was founded in 1853 and is headquartered in London, the United Kingdom.

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.