Analyzing HSBC (NYSE:HSBC) and DNB Bank ASA (OTCMKTS:DNBBY)

HSBC (NYSE:HSBC) and DNB Bank ASA (OTCMKTS:DNBBY) are both large-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Earnings & Valuation

This table compares HSBC and DNB Bank ASA”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HSBC	$141.75 billion	1.62	$23.98 billion	$5.05	13.15
DNB Bank ASA	$27.50 billion	1.53	$4.26 billion	$2.77	9.81

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

Dividends

HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 3.0%. DNB Bank ASA pays an annual dividend of $1.18 per share and has a dividend yield of 4.3%. HSBC pays out 39.2% of its earnings in the form of a dividend. DNB Bank ASA pays out 42.6% 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.

Profitability

This table compares HSBC and DNB Bank ASA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HSBC	13.48%	12.73%	0.81%
DNB Bank ASA	21.24%	15.72%	1.16%

Volatility & Risk

HSBC has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, DNB Bank ASA has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Institutional and Insider Ownership

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

Analyst Ratings

This is a breakdown of recent ratings for HSBC and DNB Bank ASA, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HSBC	0	7	3	1	2.45
DNB Bank ASA	1	3	0	0	1.75

HSBC presently has a consensus price target of $63.00, suggesting a potential downside of 5.10%. Given HSBC’s stronger consensus rating and higher probable upside, equities analysts plainly believe HSBC is more favorable than DNB Bank ASA.

Summary

HSBC beats DNB Bank ASA on 12 of the 17 factors compared between the two stocks.

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.

About DNB Bank ASA

DNB Bank ASA provides financial services for individual and business customers in Norway and internationally. The company offers savings, current, and pension accounts; fixed rate and security deposits; home and cabin mortgages, car and consumer loans, business loans, and refinancing; car, house, home contents, travel, personal, and non-life insurance product; payment services; and online and mobile banking services, as well as cards. It also provides overdraft facilities; leasing services; factoring, supply chain, and receivable purchase financing services; bank guarantee, secure trading, documentary collection, and letter of credit services; investment banking services, such as mergers and acquisition, equity and debt capital market, shares and securities, mutual funds and trading, and bonds and commodities; and private financing, as well as equity trading, foreign exchange, interest rates, and risk advisory services. In addition, the company offers treasury management, working capital, trade finance, auto lease and equipment financing, and corporate finance services, as well as act as an estate agents. DNB Bank ASA was founded in 1822 and is headquartered in Oslo, Norway.