Head to Head Comparison: HSBC (NYSE:HSBC) versus Texas Community Bancshares (NASDAQ:TCBS)

HSBC (NYSE:HSBC) and Texas Community Bancshares (NASDAQ:TCBS) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for HSBC and Texas Community Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HSBC	2	10	4	0	2.12
Texas Community Bancshares	0	1	0	0	2.00

HSBC currently has a consensus price target of $97.00, suggesting a potential upside of 11.38%. Given HSBC’s stronger consensus rating and higher possible upside, analysts plainly believe HSBC is more favorable than Texas Community Bancshares.

Institutional & Insider Ownership

1.5% of HSBC shares are owned by institutional investors. Comparatively, 15.8% of Texas Community Bancshares shares are owned by institutional investors. 0.0% of HSBC shares are owned by insiders. Comparatively, 15.3% of Texas Community Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 2.3%. Texas Community Bancshares pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. HSBC pays out 25.7% of its earnings in the form of a dividend. Texas Community Bancshares pays out 19.8% 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. Texas Community Bancshares has increased its dividend for 1 consecutive years.

Profitability

This table compares HSBC and Texas Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HSBC	19.59%	14.33%	0.85%
Texas Community Bancshares	12.68%	6.14%	0.76%

Earnings and Valuation

This table compares HSBC and Texas Community Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HSBC	$131.35 billion	2.27	$22.29 billion	$7.70	11.31
Texas Community Bancshares	$25.57 million	1.93	$2.84 million	$1.21	14.22

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

Risk & Volatility

HSBC has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Texas Community Bancshares has a beta of -0.01, suggesting that its stock price is 101% less volatile than the S&P 500.

Summary

HSBC beats Texas Community Bancshares 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 Texas Community Bancshares

Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.