Analyzing HSBC (NYSE:HSBC) and Mizuho Financial Group (NYSE:MFG)

HSBC (NYSE:HSBC) and Mizuho Financial Group (NYSE:MFG) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.

Dividends

HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 2.1%. Mizuho Financial Group pays an annual dividend of $0.14 per share and has a dividend yield of 1.5%. HSBC pays out 32.5% of its earnings in the form of a dividend. Mizuho Financial Group pays out 18.4% 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 Mizuho Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HSBC	16.06%	13.35%	0.82%
Mizuho Financial Group	16.35%	15.19%	0.45%

Risk & Volatility

HSBC has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500. Comparatively, Mizuho Financial Group has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for HSBC and Mizuho Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HSBC	0	6	5	0	2.45
Mizuho Financial Group	0	1	1	0	2.50

HSBC currently has a consensus price target of $63.00, indicating a potential downside of 31.62%. Given HSBC’s higher possible upside, analysts plainly believe HSBC is more favorable than Mizuho Financial Group.

Institutional and Insider Ownership

1.5% of HSBC shares are owned by institutional investors. Comparatively, 3.3% of Mizuho Financial Group shares are owned by institutional investors. 0.0% of HSBC shares are owned by company insiders. Comparatively, 0.0% of Mizuho Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares HSBC and Mizuho Financial Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HSBC	$131.35 billion	2.41	$22.29 billion	$6.10	15.10
Mizuho Financial Group	$4,316.92 billion	0.03	$8.29 billion	$0.76	12.20

HSBC has higher earnings, but lower revenue than Mizuho Financial Group. Mizuho Financial Group is trading at a lower price-to-earnings ratio than HSBC, indicating that it is currently the more affordable of the two stocks.

Summary

HSBC beats Mizuho Financial Group on 9 of the 15 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 Mizuho Financial Group

Mizuho Financial Group, Inc., together with its subsidiaries, engages in banking, trust, securities, and other businesses related to financial services in Japan, the Americas, Europe, Asia/Oceania, and internationally. It operates through Retail & Business Banking Company, Corporate & Institutional Company, Global Corporate Company, Global Markets Company, Asset Management Company, and Others segments. The company provides deposit products; syndicated, housing, and card loans; business matching services; and advisory services related to overseas expansions, and mergers and acquisitions-related services. It also offers consulting services, including asset management and asset succession; payroll services; and sells lottery tickets issued by prefectures and ordinance-designated cities. In addition, it offers fund management, underwriting of equity and bonds, risk hedging products, etc. for corporate customers; solutions based on capital management, business strategy, and financial strategy; real estate services; advisory services and solutions, such as advice on proposals on various investment products to financial institutions; and financial services that include funding support and public bonds underwriting. Further, the company offers corporate finance and transaction banking srvices; sales and trading services; investment products; pension funds; and ALM and investment services, including stable capital raising and balance sheet management, as well as management of fixed income, equity, and other securities portfolios. Additionally, the company provides online banking, cash management solutions, currency transaction, trade finance, custody, yen correspondence settlement, and research and consulting services; trust, securitization and structured finance, and stock transfers; and private banking and information technology-related services. Mizuho Financial Group, Inc. was founded in 2000 and is headquartered in Tokyo, Japan.