Head-To-Head Comparison: HSBC (NYSE:HSBC) vs. Banco Santander Chile (NYSE:BSAC)

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

Valuation & Earnings

This table compares Banco Santander Chile 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
Banco Santander Chile	$2,851.15 billion	0.01	$1.12 billion	$2.30	14.43
HSBC	$66.22 billion	4.38	$22.29 billion	$6.05	13.95

HSBC has lower revenue, but higher earnings than Banco Santander Chile. HSBC is trading at a lower price-to-earnings ratio than Banco Santander Chile, indicating that it is currently the more affordable of the two stocks.

Dividends

Banco Santander Chile pays an annual dividend of $0.99 per share and has a dividend yield of 3.0%. HSBC pays an annual dividend of $8.98 per share and has a dividend yield of 10.6%. Banco Santander Chile pays out 43.0% 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.

Profitability

This table compares Banco Santander Chile and HSBC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander Chile	24.57%	21.51%	1.57%
HSBC	16.07%	13.10%	0.82%

Volatility & Risk

Banco Santander Chile has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Institutional & Insider Ownership

6.4% of Banco Santander Chile shares are owned by institutional investors. Comparatively, 1.5% of HSBC shares are owned by institutional investors. 0.0% of HSBC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Banco Santander Chile and HSBC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander Chile	1	4	2	0	2.14
HSBC	0	3	7	0	2.70

Banco Santander Chile presently has a consensus price target of $35.50, suggesting a potential upside of 7.00%. HSBC has a consensus price target of $63.00, suggesting a potential downside of 25.38%. Given Banco Santander Chile’s higher possible upside, analysts plainly believe Banco Santander Chile is more favorable than HSBC.

Summary

Banco Santander Chile beats HSBC on 8 of the 15 factors compared between the two stocks.

About Banco Santander Chile

Banco Santander-Chile, together with its subsidiaries, provides commercial and retail banking services in Chile. It operates through Retail Banking, Middle-Market, Corporate Investment Banking, and Corporate Activities segments. The company offers debit and credit cards, checking accounts, and savings products; consumer, automobile, commercial, mortgage, and government-guaranteed loans; and Chilean peso and foreign currency-denominated loans to finance various commercial transactions, trade, foreign currency forward contracts, and credit lines, as well as mortgage financing services. It also provides mutual fund management, insurance and securities brokerage, foreign exchange services, financial leasing, financial consulting and advisory, investment management, foreign trade, leasing, factoring, treasury, and transactional services, as well as specialized services to finance residential projects. In addition, the company offers short-term financing and fundraising, and brokerage services, as well as derivatives, securitization, and other products; and manages capital allocations. It serves individuals, small to middle-sized entities, companies, and large corporations, as well as universities, government entities, and local and regional governments. The company was incorporated in 1977 and is headquartered in Santiago, Chile. Banco Santander-Chile operates as a subsidiary of Banco Santander, S.A.

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.