Head-To-Head Comparison: Eastern Bankshares (NASDAQ:EBC) vs. HSBC (NYSE:HSBC)

Eastern Bankshares (NASDAQ:EBCGet Rating) and HSBC (NYSE:HSBCGet Rating) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Insider & Institutional Ownership

59.0% of Eastern Bankshares shares are owned by institutional investors. Comparatively, 1.1% of HSBC shares are owned by institutional investors. 1.4% of Eastern Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Eastern Bankshares has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.

Profitability

This table compares Eastern Bankshares and HSBC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eastern Bankshares 25.67% 5.79% 0.89%
HSBC 27.66% 6.61% 0.46%

Valuation and Earnings

This table compares Eastern Bankshares and HSBC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eastern Bankshares $628.31 million 5.99 $154.66 million $1.03 19.86
HSBC $49.55 billion 2.71 $13.92 billion $3.35 9.81

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

Dividends

Eastern Bankshares pays an annual dividend of $0.40 per share and has a dividend yield of 2.0%. HSBC pays an annual dividend of $1.24 per share and has a dividend yield of 3.8%. Eastern Bankshares pays out 38.8% of its earnings in the form of a dividend. HSBC pays out 37.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. HSBC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Eastern Bankshares and HSBC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eastern Bankshares 0 1 1 0 2.50
HSBC 0 5 6 0 2.55

Eastern Bankshares currently has a consensus price target of $22.75, indicating a potential upside of 11.19%. Given Eastern Bankshares’ higher possible upside, analysts clearly believe Eastern Bankshares is more favorable than HSBC.

Summary

HSBC beats Eastern Bankshares on 9 of the 16 factors compared between the two stocks.

About Eastern Bankshares

(Get Rating)

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. It operates in two segments, Banking Business and Insurance Agency Business. The company provides interest-bearing and non interest-bearing checking deposits, money market deposits, savings deposits, and time certificates of deposits, as well as debit and credit cards. It also offers commercial and industrial loans, commercial real estate and construction loans, small business loans, residential real estate loans, home equity, and lines of credit, as well as other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides cash reserves, cash management, merchant, escrow express, government banking, international banking, interest on lawyers trust accounts, retirement planning, and business telephone banking services, as well as products and services for not-for-profit and healthcare. Further, it offers trust and investment products and services; community development and asset-based lending services; financial planning, portfolio management, wealth management, private banking, and fiduciary products; online, mobile, and telephone banking services; and automated lock box collection and account reconciliation services, as well as various insurance products. As of December 31, 2021, the company operated 105 branch offices in eastern Massachusetts and southern New Hampshire; and 23 non-branch offices in eastern Massachusetts, one office in New Hampshire, and one office in Rhode Island. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.

About HSBC

(Get Rating)

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.

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