Nordea Bank (OTCMKTS:NRDBY) versus HSBC (NYSE:HSBC) Head-To-Head Survey

HSBC (NYSE:HSBC) and Nordea Bank (OTCMKTS:NRDBY) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, profitability and analyst recommendations.

Risk & Volatility

HSBC has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Nordea Bank has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Profitability

This table compares HSBC and Nordea Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HSBC	12.85%	12.78%	0.81%
Nordea Bank	22.36%	15.61%	0.75%

Earnings & Valuation

This table compares HSBC and Nordea Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HSBC	$141.75 billion	2.06	$23.98 billion	$4.75	17.93
Nordea Bank	$23.46 billion	2.82	$5.48 billion	$1.58	12.22

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

Dividends

HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 2.3%. Nordea Bank pays an annual dividend of $0.47 per share and has a dividend yield of 2.4%. HSBC pays out 41.7% of its earnings in the form of a dividend. Nordea Bank pays out 29.7% 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. Nordea Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

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

Analyst Recommendations

This is a breakdown of current recommendations for HSBC and Nordea Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HSBC	0	4	6	1	2.73
Nordea Bank	1	3	2	1	2.43

HSBC currently has a consensus price target of $63.00, suggesting a potential downside of 26.04%. Given HSBC’s stronger consensus rating and higher probable upside, analysts plainly believe HSBC is more favorable than Nordea Bank.

Summary

HSBC beats Nordea Bank on 10 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 Nordea Bank

Nordea Bank Abp offers banking products and services in Sweden, Finland, Norway, Denmark, and internationally. It operates through Personal Banking, Business Banking, Large Corporates & Institutions, and Asset & Wealth Management segments. The Personal Banking segment provides various financial services to customers through mobile banking, over the phone, online meetings, and branch offices. The Business Banking segment offers payments, cash management, cards, working capital management, and cards and finance solutions to corporate and personal customers. The Large Corporates & Institutions segment provides financing, cash management and payment, investment banking, capital market products, and securities services to corporate and institutional customers. The Asset & Wealth Management segment offers investment, savings, and risk management solutions to high net worth individuals and institutional investors. It also offers account-based products, such as lending and deposit; project finance services, asset-based financing through leasing, hire purchase, and factoring, as well as sales to finance partners, such as dealers, vendors, and retailers; financial instruments or arrangement for financial instruments, including currencies, commodities, stocks, and bonds; and asset management, including investment funds, discretionary management, portfolio advice, equity trading, and pension accounts, as well as life insurance and pension products and services. Nordea Bank Abp was founded in 1820 and is headquartered in Helsinki, Finland.