HSBC HOLDINGS PLC-SPONS ADR (HSBC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HSBC - US4042804066 - ADR
87 USD
-1.49 (-1.68%)
87.68 USD
+0.68 (+0.78%)
Overall HSBC gets a fundamental rating of 3 out of 10. We evaluated HSBC against 383 industry peers in the Banks industry. While HSBC is still in line with the averages on profitability rating, there are concerns on its financial health. HSBC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- HSBC had positive earnings in the past year.
- In the past year HSBC had a positive cash flow from operations.
- Each year in the past 5 years HSBC has been profitable.
- In the past 5 years HSBC always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 0.96%, HSBC is in line with its industry, outperforming 55.87% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 16.05%, HSBC belongs to the top of the industry, outperforming 95.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.96% | ||
| ROE | 16.05% | ||
| ROIC | N/A |
ROA(3y)0.66%
ROA(5y)0.51%
ROE(3y)10.85%
ROE(5y)8.24%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- HSBC has a Profit Margin of 24.34%. This is comparable to the rest of the industry: HSBC outperforms 49.61% of its industry peers.
- In the last couple of years the Profit Margin of HSBC has grown nicely.
- HSBC does not have Operating Margin and Gross Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | 24.34% | ||
| GM | N/A |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y16.29%
PM growth 5Y29.2%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- HSBC does not have a ROIC to compare to the WACC, probably because it is not profitable.
- HSBC has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for HSBC has been reduced compared to 5 years ago.
- HSBC has a worse debt/assets ratio than last year.
2.2 Solvency
- The Debt to FCF ratio of HSBC is 7.73, which is on the high side as it means it would take HSBC, 7.73 years of fcf income to pay off all of its debts.
- HSBC has a worse Debt to FCF ratio (7.73) than 76.24% of its industry peers.
- HSBC has a Debt/Equity ratio of 1.91. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of HSBC (1.91) is worse than 87.99% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.91 | ||
| Debt/FCF | 7.73 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC6.47%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
- HSBC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.70%, which is quite good.
- HSBC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.51% yearly.
- The Revenue has decreased by -1.62% in the past year.
- The Revenue has been growing slightly by 1.30% on average over the past years.
EPS 1Y (TTM)12.7%
EPS 3Y21.77%
EPS 5Y13.51%
EPS Q2Q%5.88%
Revenue 1Y (TTM)-1.62%
Revenue growth 3Y4.95%
Revenue growth 5Y1.3%
Sales Q2Q%2.43%
3.2 Future
- The Earnings Per Share is expected to grow by 3.52% on average over the next years.
- Based on estimates for the next years, HSBC will show a small growth in Revenue. The Revenue will grow by 2.23% on average per year.
EPS Next Y10.49%
EPS Next 2Y8.9%
EPS Next 3Y8.96%
EPS Next 5Y3.52%
Revenue Next Year3.12%
Revenue Next 2Y2.49%
Revenue Next 3Y2.75%
Revenue Next 5Y2.23%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 12.17, HSBC is valued correctly.
- Compared to the rest of the industry, the Price/Earnings ratio of HSBC is on the same level as its industry peers.
- HSBC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.60.
- The Price/Forward Earnings ratio is 11.20, which indicates a very decent valuation of HSBC.
- HSBC's Price/Forward Earnings ratio is in line with the industry average.
- When comparing the Price/Forward Earnings ratio of HSBC to the average of the S&P500 Index (25.83), we can say HSBC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.17 | ||
| Fwd PE | 11.2 |
4.2 Price Multiples
- Based on the Price/Free Cash Flow ratio, HSBC is valued cheaply inside the industry as 89.30% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.27 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- HSBC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.16
PEG (5Y)0.9
EPS Next 2Y8.9%
EPS Next 3Y8.96%
5. Dividend
5.1 Amount
- HSBC has a Yearly Dividend Yield of 3.98%.
- HSBC's Dividend Yield is rather good when compared to the industry average which is at 2.60. HSBC pays more dividend than 84.33% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, HSBC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.98% |
5.2 History
- The dividend of HSBC is nicely growing with an annual growth rate of 13.67%!
- HSBC has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)13.67%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 43.96% of the earnings are spent on dividend by HSBC. This is a bit on the high side, but may be sustainable.
- HSBC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP43.96%
EPS Next 2Y8.9%
EPS Next 3Y8.96%
HSBC HOLDINGS PLC-SPONS ADR / HSBC FAQ
Can you provide the ChartMill fundamental rating for HSBC HOLDINGS PLC-SPONS ADR?
ChartMill assigns a fundamental rating of 3 / 10 to HSBC.
Can you provide the valuation status for HSBC HOLDINGS PLC-SPONS ADR?
ChartMill assigns a valuation rating of 5 / 10 to HSBC HOLDINGS PLC-SPONS ADR (HSBC). This can be considered as Fairly Valued.
What is the profitability of HSBC stock?
HSBC HOLDINGS PLC-SPONS ADR (HSBC) has a profitability rating of 4 / 10.
Can you provide the financial health for HSBC stock?
The financial health rating of HSBC HOLDINGS PLC-SPONS ADR (HSBC) is 1 / 10.
Can you provide the dividend sustainability for HSBC stock?
The dividend rating of HSBC HOLDINGS PLC-SPONS ADR (HSBC) is 6 / 10 and the dividend payout ratio is 43.96%.