First Community Corporation (NASDAQ: FCCO) and HSBC Holdings PLC (NYSE:HSBC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

47.1% of First Community Corporation shares are held by institutional investors. Comparatively, 2.2% of HSBC Holdings PLC shares are held by institutional investors. 8.6% of First Community Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares First Community Corporation and HSBC Holdings PLC’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Community Corporation $36.89 million 3.83 $6.76 million $1.01 20.89
HSBC Holdings PLC $42.93 billion 4.57 $2.03 billion $0.50 96.80

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

Profitability

This table compares First Community Corporation and HSBC Holdings PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Community Corporation 17.39% 8.24% 0.75%
HSBC Holdings PLC 1.42% 2.08% 0.16%

Analyst Ratings

This is a summary of current recommendations and price targets for First Community Corporation and HSBC Holdings PLC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Community Corporation 0 0 1 0 3.00
HSBC Holdings PLC 0 6 3 0 2.33

First Community Corporation currently has a consensus target price of $21.00, indicating a potential downside of 0.47%. HSBC Holdings PLC has a consensus target price of $27.00, indicating a potential downside of 44.21%. Given First Community Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe First Community Corporation is more favorable than HSBC Holdings PLC.

Dividends

First Community Corporation pays an annual dividend of $0.36 per share and has a dividend yield of 1.7%. HSBC Holdings PLC pays an annual dividend of $2.00 per share and has a dividend yield of 4.1%. First Community Corporation pays out 35.6% of its earnings in the form of a dividend. HSBC Holdings PLC pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HSBC Holdings PLC has raised its dividend for 3 consecutive years. HSBC Holdings PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

First Community Corporation has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, HSBC Holdings PLC has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.

Summary

First Community Corporation beats HSBC Holdings PLC on 9 of the 17 factors compared between the two stocks.

About First Community Corporation

First Community Corporation is a bank holding company for First Community Bank (the Bank). The Bank offers commercial and retail banking services to small-to-medium sized businesses, professional concerns and individuals, primarily in Richland, Lexington, Kershaw and Newberry Counties of South Carolina and the surrounding areas. The Bank offers a range of traditional banking products and services for professionals and small-to medium-sized businesses, including consumer and commercial, mortgage, brokerage and investment, and insurance services. The Bank also offers online banking to its customers. Its other services include Internet banking, cash management services, safe deposit boxes, traveler checks, direct deposit of payroll and social security checks, and automatic drafts for various accounts. The Bank offers non-deposit investment products and other investment brokerage services through a registered representative with an affiliation through LPL Financial.

About HSBC Holdings PLC

HSBC Holdings plc (HSBC) is the banking and financial services company. The Company manages its products and services through four businesses: Retail Banking and Wealth Management (RBWM), Commercial Banking (CMB), Global Banking and Markets (GB&M), and Global Private Banking (GPB). It operates across various geographical regions, which include Europe, Asia, Middle East and North Africa, North America and Latin America. RBWM business offers Retail Banking, Wealth Management, Asset Management and Insurance. CMB services include working capital, term loans, payment services and international trade facilitation, among other services, as well as expertise in mergers and acquisitions, and access to financial markets. GB&M supports government, corporate and institutional clients across the world. GPB’s products and services include Investment Management, Private Wealth Solutions, and a range of Private Banking services.

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