Head to Head Comparison: HSBC (NYSE:HSBC) & Hanover Bancorp (NASDAQ:HNVR)

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

Insider & Institutional Ownership

1.5% of HSBC shares are owned by institutional investors. Comparatively, 15.0% of Hanover Bancorp shares are owned by institutional investors. 0.0% of HSBC shares are owned by company insiders. Comparatively, 24.4% of Hanover Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares HSBC and Hanover Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

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

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.

Analyst Ratings

This is a breakdown of current ratings for HSBC and Hanover Bancorp, as reported by MarketBeat.

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

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

Profitability

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

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

Risk & Volatility

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

Dividends

HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 2.1%. Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.6%. HSBC pays out 28.1% of its earnings in the form of a dividend. Hanover Bancorp pays out 31.5% 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. HSBC is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

HSBC beats Hanover Bancorp on 11 of the 16 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 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.