LSE:HSBA

Stock Analysis Report

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Executive Summary

HSBC Holdings plc provides banking and financial products and services.


Snowflake Analysis

Excellent balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has HSBC Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HSBA's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

14.3%

HSBA

15.6%

GB Banks

5.5%

GB Market


1 Year Return

-35.0%

HSBA

-34.7%

GB Banks

-9.2%

GB Market

Return vs Industry: HSBA matched the UK Banks industry which returned -37.9% over the past year.

Return vs Market: HSBA underperformed the UK Market which returned -9.5% over the past year.


Shareholder returns

HSBAIndustryMarket
7 Day14.3%15.6%5.5%
30 Day5.2%11.0%10.8%
90 Day-14.3%-15.5%-0.4%
1 Year-33.2%-35.0%-32.8%-34.7%-4.8%-9.2%
3 Year-30.2%-39.2%-34.4%-41.8%-0.8%-12.9%
5 Year-8.5%-30.4%-32.8%-45.3%18.1%-8.2%

Price Volatility Vs. Market

How volatile is HSBC Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is HSBC Holdings undervalued compared to its fair value and its price relative to the market?

30x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: HSBA (£3.99) is trading above our estimate of fair value (£3.28)

Significantly Below Fair Value: HSBA is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: HSBA is poor value based on its PE Ratio (28x) compared to the Banks industry average (6.1x).

PE vs Market: HSBA is poor value based on its PE Ratio (28x) compared to the UK market (15x).


Price to Earnings Growth Ratio

PEG Ratio: HSBA is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: HSBA is good value based on its PB Ratio (0.5x) compared to the GB Banks industry average (0.5x).


Next Steps

Future Growth

How is HSBC Holdings forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

34.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HSBA's forecast earnings growth (36.6% per year) is above the savings rate (1.2%).

Earnings vs Market: HSBA's earnings (36.6% per year) are forecast to grow faster than the UK market (20.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: HSBA's revenue (2.5% per year) is forecast to grow slower than the UK market (3.5% per year).

High Growth Revenue: HSBA's revenue (2.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HSBA's Return on Equity is forecast to be low in 3 years time (7.1%).


Next Steps

Past Performance

How has HSBC Holdings performed over the past 5 years?

-2.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HSBA has a large one-off loss of $7.5B impacting its March 31 2020 financial results.

Growing Profit Margin: HSBA's current net profit margins (7.2%) are lower than last year (26.1%).


Past Earnings Growth Analysis

Earnings Trend: HSBA's earnings have declined by -2.9% per year over the past 5 years.

Accelerating Growth: HSBA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HSBA had negative earnings growth (-73.5%) over the past year, making it difficult to compare to the Banks industry average (9.1%).


Return on Equity

High ROE: HSBA's Return on Equity (3.2%) is considered low.


Next Steps

Financial Health

How is HSBC Holdings's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: HSBA's Assets to Equity ratio (14.7x) is moderate.

Allowance for Bad Loans: HSBA has a low allowance for bad loans (71%).

Low Risk Liabilities: 56% of HSBA's liabilities are made up of primarily low risk sources of funding.

Loan Level: HSBA has an appropriate level of Loans to Assets ratio (39%).

Low Risk Deposits: HSBA's Loans to Deposits ratio (74%) is appropriate.

Level of Bad Loans: HSBA has an appropriate level of bad loans (1.3%).


Next Steps

Dividend

What is HSBC Holdings's current dividend yield, its reliability and sustainability?

6.28%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate HSBA's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate HSBA's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if HSBA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if HSBA's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: HSBA is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of HSBA's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Noel Quinn (57yo)

0.83

Tenure

US$2,713,392

Compensation

Mr. Noel P. Quinn serves as Group Chief Executive Officer of HSBC Holdings Plc since March 17, 2020 and serves as its Member of Group Management Board. Mr. Quinn served as Interim Group Chief Executive Off ...


CEO Compensation Analysis

Compensation vs Market: Noel's total compensation ($USD3.41M) is about average for companies of similar size in the UK market ($USD3.93M).

Compensation vs Earnings: Insufficient data to compare Noel's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Noel Quinn
Group CEO0.83yrUS$2.71m0.0057% $4.9m
Ewen Stevenson
Group CFO1.42yrsUS$4.88m0.0044% $3.7m
Tung Shun Wong
Dpty Chairman & CEO of The Hongkong and Shanghai Banking Corp Ltd and Member of the Group Mgt Boardno datano data0.011% $9.2m
Samir Assaf
Chairman of Corporate and Institutional Banking & Member of the Group Management Boardno datano data0.0099% $8.5m
Stuart Levey
Chief Legal Officer & Member of the Group Management Board8.42yrsno datano data
Manveen Kaur
Head of Wholesale Market & Credit Risk7.17yrsno datano data
Georges Elhedery
Co-CEO of Global Banking & Markets and Member of Management Board0.25yrno datano data
Andy Maguire
Chairman of Advisory Board & Member of Management Board3.42yrsno datano data
Stephen Moss
Regional CEO for Europeno datano datano data
Charlie Nunn
Head of Combined Wealth & Personal Banking and Member of Group Management Board2.42yrsno datano data

2.4yrs

Average Tenure

55yo

Average Age

Experienced Management: HSBA's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Noel Quinn
Group CEO0.83yrUS$2.71m0.0057% $4.9m
Ewen Stevenson
Group CFO1.42yrsUS$4.88m0.0044% $3.7m
Andy Maguire
Chairman of Advisory Board & Member of Management Board3.42yrsno datano data
Mark Tucker
Non-Executive Group Chairman of the Board2.67yrsUS$1.73m0.0015% $1.3m
David Nish
Senior Independent Non-Executive Director0.33yrUS$246.00k0.00025% $214.2k
Jackson Tai
Independent Non-Executive Director3.75yrsUS$455.00k0.00033% $282.8k
Stuart Alan Rose
Member of European Advisory Council of Investment Banking Operationsno datano datano data
May-Lung Cha
Independent Non-Executive Director9.25yrsUS$298.00k0.000080% $68.5k
Claudio Boada Pallerés
Member of Advisory Boardno datano datano data
Pauline Françoise van der Meer Mohr
Independent Non-Executive Director4.75yrsUS$273.00k0.000070% $60.0k

3.0yrs

Average Tenure

59yo

Average Age

Experienced Board: HSBA's board of directors are considered experienced (3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: HSBA insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

HSBC Holdings plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: HSBC Holdings plc
  • Ticker: HSBA
  • Exchange: LSE
  • Founded: 1865
  • Industry: Diversified Banks
  • Sector: Banks
  • Market Cap: UK£85.686b
  • Shares outstanding: 20.26b
  • Website: https://www.hsbc.com

Number of Employees


Location

  • HSBC Holdings plc
  • 8 Canada Square
  • 42nd Floor
  • London
  • Greater London
  • E14 5HQ
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HBCY.FOTCPK (Pink Sheets LLC)YesOrdinary Shares USD 0.50USUSDApr 1991
HSBALSE (London Stock Exchange)YesOrdinary Shares USD 0.50GBGBPApr 1991
HSBC.BHBER (The Bermuda Stock Exchange)YesOrdinary Shares USD 0.50BMUSDApr 1991
HSBENXTPA (Euronext Paris)YesOrdinary Shares USD 0.50FREURApr 1991
5SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary Shares USD 0.50HKHKDApr 1991
HBC1XTRA (XETRA Trading Platform)YesOrdinary Shares USD 0.50DEEURApr 1991
HBC1DB (Deutsche Boerse AG)YesOrdinary Shares USD 0.50DEEURApr 1991
HSBALBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary Shares USD 0.50GBGBPApr 1991
HSBPBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary Shares USD 0.50GBEURApr 1991
5SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary Shares USD 0.50HKHKDApr 1991
5SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary Shares USD 0.50HKHKDApr 1991
HSBCNYSE (New York Stock Exchange)SPON ADR NEWUSUSDApr 1991
HBC NBMV (Bolsa Mexicana de Valores)SPON ADR NEWMXMXNApr 1991
HBC2DB (Deutsche Boerse AG)SPON ADR NEWDEEURApr 1991
HBCBASE (Buenos Aires Stock Exchange)CEDEAR EACH 2 REPR 1 ADRARARSJul 2001
HSEA CLNYSE (New York Stock Exchange)SUB CAP 8.125%USUSDApr 2008

Biography

HSBC Holdings plc provides banking and financial products and services. The company operates through Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking segments. The Retail Banking and Wealth Management segment offers personal banking products, such as current and savings accounts, mortgages and personal loans, credit cards, debit cards, and domestic and international payment services, as well as wealth management services, including insurance and investment products, global asset management services, and financial planning services. The Commercial Banking segment provides credit and lending, international trade and receivables finance, treasury management and liquidity solutions, commercial insurance, and investments to small and medium sized enterprises, mid-market enterprises, and corporates. This segment also offers foreign exchange products, raising capital on debt and equity markets, and advisory services. The Global Banking and Markets segment is involved in the provision of financing; advisory and transaction services, a markets business that provides services in credit, rates, foreign exchange, equities, money markets, and securities services; and investment activities. The Global Private Banking segment provides a range of services to high net worth individuals and families. The company has operations in 64 countries and territories located in Europe, Asia, North America, Latin America, the Middle East, and North Africa. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/05 21:23
End of Day Share Price2020/06/05 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.