Head-To-Head Review: HSBC (NYSE:HSBC) & Esquire Financial (NASDAQ:ESQ)

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

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Esquire Financial	$164.50 million	9.19	$50.82 million	$6.01	20.79
HSBC	$131.35 billion	2.23	$22.29 billion	$7.70	11.10

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

Analyst Ratings

This is a breakdown of recent ratings for Esquire Financial and HSBC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Esquire Financial	0	1	0	3	3.50
HSBC	2	10	4	0	2.12

Esquire Financial presently has a consensus price target of $122.50, indicating a potential downside of 1.97%. HSBC has a consensus price target of $97.00, indicating a potential upside of 13.53%. Given HSBC’s higher probable upside, analysts plainly believe HSBC is more favorable than Esquire Financial.

Profitability

This table compares Esquire Financial and HSBC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Esquire Financial	26.92%	21.49%	2.66%
HSBC	19.59%	14.33%	0.85%

Institutional & Insider Ownership

54.7% of Esquire Financial shares are owned by institutional investors. Comparatively, 1.5% of HSBC shares are owned by institutional investors. 13.9% of Esquire Financial shares are owned by company insiders. Comparatively, 0.0% of HSBC shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Esquire Financial has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.

Dividends

Esquire Financial pays an annual dividend of $0.80 per share and has a dividend yield of 0.6%. HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 2.3%. Esquire Financial pays out 13.3% of its earnings in the form of a dividend. HSBC pays out 25.7% 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. Esquire Financial has increased its dividend for 4 consecutive years.

Summary

Esquire Financial beats HSBC on 11 of the 18 factors compared between the two stocks.

About Esquire Financial

Esquire Financial Holdings, Inc. operates as the bank holding company for Esquire Bank, National Association that provides commercial banking products and services to legal industry and small businesses, and commercial and retail customers in the United States. The company offers checking, savings, money market, and time deposits, as well as certificates of deposit. It also provides commercial loans, such as short-term financing for inventory, receivables, the purchase of supplies, or other operating needs arising during the normal course of business, as well as loans to its qualified ISO customers; commercial lines of credit; consumer loans consisting of post-settlement consumer and structured settlement loans to plaintiffs and claimants, as well as loans to individuals for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs; and real estate loans, such as multifamily, 1-4 family residential, commercial real estate, and construction loans, as well as merchant services. In addition, it offers cash management, cash sweep, online and mobile banking, individual retirement accounts, and working capital lines of credit. Esquire Financial Holdings, Inc. was founded in 2006 and is headquartered in Jericho, New York.

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.