Salisbury Bancorp (NASDAQ:SAL) and HSBC (NYSE:HSBC) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.

Risk and Volatility

Salisbury Bancorp has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.

Dividends

Salisbury Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 3.0%. HSBC pays an annual dividend of $2.00 per share and has a dividend yield of 5.6%. Salisbury Bancorp pays out 37.2% of its earnings in the form of a dividend. HSBC pays out 63.5% 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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Salisbury Bancorp and HSBC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Salisbury Bancorp 0 0 1 0 3.00
HSBC 7 6 1 0 1.57

HSBC has a consensus target price of $40.59, suggesting a potential upside of 13.92%. Given HSBC’s higher possible upside, analysts plainly believe HSBC is more favorable than Salisbury Bancorp.

Insider and Institutional Ownership

8.3% of Salisbury Bancorp shares are owned by institutional investors. Comparatively, 2.5% of HSBC shares are owned by institutional investors. 13.2% of Salisbury Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Salisbury Bancorp 19.01% 9.20% 0.86%
HSBC 24.96% 7.22% 0.54%

Earnings & Valuation

This table compares Salisbury Bancorp and HSBC’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Salisbury Bancorp $49.32 million 2.12 $8.82 million $3.01 12.33
HSBC $53.78 billion 2.68 $12.70 billion $3.15 11.31

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

Summary

HSBC beats Salisbury Bancorp on 8 of the 15 factors compared between the two stocks.

About Salisbury Bancorp

Salisbury Bancorp, Inc. operates as the bank holding company for Salisbury Bank and Trust Company that provides commercial banking, consumer financing, retail banking, and trust and wealth advisory services. It offers various retail and commercial deposit products. The company also provides loans, such as residential and commercial real estate loans; construction loans; commercial loans; and consumer loans, including home equity loans and lines of credit, and auto and personal installment loans. In addition, it offers a range of fiduciary services, including trust and estate administration, wealth advisory, and investment management services to individuals, families, businesses, and institutions. Further, the company provides additional depositor related services consisting of landlord/tenant lease security accounts and services, merchant services, payroll services, ATM services, bank-by-phone services, Internet banking services, Internet bill pay services, person to person payments, bank to bank transfers, mobile banking services, and online financial management with account aggregation services, as well as cash management services, including remote deposit capture, ACH origination, wire transfers, and positive pay services. It operates through a network of 14 banking offices and 10 ATMs located in Litchfield County, Connecticut; Dutchess, Orange, and Ulster Counties, New York; and Berkshire County, Massachusetts. Salisbury Bancorp, Inc. was founded in 1848 and is headquartered in Lakeville, Connecticut.

About HSBC

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 and services, mortgages and loans, credit cards, insurance and investment products, savings products, international services, and wealth solutions and financial planning services, as well as telephone, Internet, and mobile banking services. The Commercial Banking segment provides services and financing for buyers and suppliers in the trade cycle; liquidity and cash management services; capital financing, including debt, equity, and advisory services; and insurance and investment products, such as business and financial protection, trade insurance, employee benefits, corporate wealth management, and other commercial risk insurance products to small enterprises, mid-market companies, and multinationals. The Global Banking and Markets segment is involved in the provision of advisory, financing, prime, research and analysis, securities, trading and sales, and transaction banking services to corporates, financial institutions, and resources and energy groups. The Global Private Banking segment provides private banking, and investment and wealth management services to business owners, entrepreneurs, and senior executives and their families. As of January 14, 2019, the company operated approximately 3,800 offices in 66 countries and territories worldwide. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.

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