Contrasting Hanover Bancorp (NASDAQ:HNVR) & HSBC (NYSE:HSBC)

Hanover Bancorp (NASDAQ:HNVR) and HSBC (NYSE:HSBC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Profitability

This table compares Hanover Bancorp and HSBC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hanover Bancorp	6.71%	6.00%	0.50%
HSBC	18.19%	13.80%	0.83%

Volatility & Risk

Hanover Bancorp has a beta of 0.11, suggesting that its stock price is 89% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500.

Earnings & Valuation

This table compares Hanover Bancorp and HSBC”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hanover Bancorp	$143.32 million	1.26	$7.49 million	$1.27	20.19
HSBC	$73.79 billion	4.47	$22.29 billion	$7.05	13.63

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

Dividends

Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.6%. HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 2.1%. Hanover Bancorp pays out 31.5% of its earnings in the form of a dividend. HSBC pays out 28.1% 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 current ratings and price targets for Hanover Bancorp and HSBC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hanover Bancorp	0	2	2	0	2.50
HSBC	2	11	3	0	2.06

Hanover Bancorp currently has a consensus price target of $28.50, indicating a potential upside of 11.15%. HSBC has a consensus price target of $97.00, indicating a potential upside of 0.95%. Given Hanover Bancorp’s stronger consensus rating and higher possible upside, equities analysts clearly believe Hanover Bancorp is more favorable than HSBC.

Insider and Institutional Ownership

15.0% of Hanover Bancorp shares are held by institutional investors. Comparatively, 1.5% of HSBC shares are held by institutional investors. 24.4% of Hanover Bancorp shares are held by company insiders. Comparatively, 0.0% of HSBC shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

HSBC beats Hanover Bancorp on 11 of the 16 factors compared between the two stocks.

About Hanover Bancorp

Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.

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.