Reviewing HSBC (NYSE:HSBC) and National Australia Bank (OTCMKTS:NABZY)

HSBC (NYSE:HSBC) and National Australia Bank (OTCMKTS:NABZY) are both large-cap 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 National Australia Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HSBC	0	7	5	0	2.42
National Australia Bank	1	1	1	2	2.80

National Australia Bank has a consensus price target of $42.50, suggesting a potential upside of 221.19%. Given National Australia Bank’s stronger consensus rating and higher possible upside, analysts plainly believe National Australia Bank is more favorable than HSBC.

Earnings & Valuation

This table compares HSBC and National Australia Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HSBC	$131.35 billion	2.56	$22.29 billion	$6.10	16.05
National Australia Bank	$38.78 billion	2.09	$4.35 billion	N/A	N/A

HSBC has higher revenue and earnings than National Australia Bank.

Profitability

This table compares HSBC and National Australia Bank’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%
National Australia Bank	N/A	N/A	N/A

Risk & Volatility

HSBC has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, National Australia Bank has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Institutional & Insider Ownership

1.5% of HSBC shares are owned by institutional investors. 0.0% of HSBC 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 2.0%. National Australia Bank pays an annual dividend of $0.57 per share and has a dividend yield of 4.3%. HSBC pays out 32.5% of its earnings in the form of a dividend.

Summary

HSBC beats National Australia Bank 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 National Australia Bank

National Australia Bank Limited provides financial services to individuals and businesses in Australia, New Zealand, and internationally. The company operates through Business and Private Banking; Personal Banking; Corporate and Institutional Banking; New Zealand Banking; and Corporate Functions and Other segments. It accepts transaction accounts, savings accounts, debit cards, and term deposits; and specialized accounts, such as foreign currency, business interest, cash maximiser, farm management, community free saver, statutory trust, and project bank accounts, as well as farm management deposits. In addition, the company provides home loans, personal loans, and business loans; vehicle and equipment finance; and trade and invoice finance, as well as business overdrafts and bank guarantees. Further, it offers insurance products consisting of home and content, landlord, travel, car, caravan and trailer, life, and business insurance products; and pension, self-managed super funds, cash management, and financial planning and advisory services. Additionally, the company provides investment products; credit, debit, and business cards; payments and merchant services; online and internet banking services; small business services; international and foreign exchange solutions; and industry specific banking services. The company was founded in 1834 and is based in Melbourne, Australia.