First Defiance Financial (FDEF) versus HSBC (HSBC) Head to Head Contrast

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

Earnings & Valuation

This table compares First Defiance Financial and HSBC’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Defiance Financial $163.93 million 3.71 $46.25 million $2.23 13.58
HSBC $53.78 billion 3.31 $12.70 billion $3.15 14.19

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

Institutional & Insider Ownership

64.4% of First Defiance Financial shares are held by institutional investors. Comparatively, 2.5% of HSBC shares are held by institutional investors. 2.4% of First Defiance Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for First Defiance Financial and HSBC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Defiance Financial 0 1 1 0 2.50
HSBC 8 4 0 0 1.33

First Defiance Financial currently has a consensus price target of $34.00, suggesting a potential upside of 12.25%. HSBC has a consensus price target of $40.59, suggesting a potential downside of 9.19%. Given First Defiance Financial’s stronger consensus rating and higher probable upside, equities analysts plainly believe First Defiance Financial is more favorable than HSBC.

Dividends

First Defiance Financial pays an annual dividend of $0.76 per share and has a dividend yield of 2.5%. HSBC pays an annual dividend of $1.50 per share and has a dividend yield of 3.4%. First Defiance Financial pays out 34.1% of its earnings in the form of a dividend. HSBC pays out 47.6% 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. First Defiance Financial has increased its dividend for 6 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
First Defiance Financial 27.21% 11.53% 1.46%
HSBC N/A 6.45% 0.48%

Volatility & Risk

First Defiance Financial has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Summary

First Defiance Financial beats HSBC on 12 of the 17 factors compared between the two stocks.

About First Defiance Financial

First Defiance Financial Corp. operates as a unitary thrift holding company that provides community-based financial services in northwest Ohio, northeast Indiana, and southeastern Michigan. It offers checking accounts, money market accounts, savings accounts, term certificate accounts, demand deposits, and certificates of deposits, as well as certificate of deposit account registry service; and commercial real estate, commercial, consumer finance, 1-4 family residential real estate, construction, and home equity and improvement loans. The company also provides trust and wealth management, and online banking services. In addition, it sells various property and casualty, group health and life, and individual health and life insurance products. The company operates through 44 full service banking centers and 1 loan production office. First Defiance Financial Corp. was incorporated in 1995 and is headquartered in Defiance, Ohio.

About HSBC

HSBC Holdings plc provides banking and financial products and services. The company operates through Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking segments. The Retail Banking and Wealth Management segment offers personal banking products and services, mortgages and loans, credit cards, insurance and investment products, savings products, international services, and wealth solutions and financial planning services, as well as telephone, Internet, and mobile banking services. The Commercial Banking segment provides services and financing for buyers and suppliers in the trade cycle; liquidity and cash management services; capital financing, including debt, equity, and advisory services; and insurance and investment products, such as business and financial protection, trade insurance, employee benefits, corporate wealth management, and other commercial risk insurance products to small enterprises, mid-market companies, and multinationals. The Global Banking and Markets segment is involved in the provision of advisory, financing, prime, research and analysis, securities, trading and sales, and transaction banking services to corporates, financial institutions, and resources and energy groups. The Global Private Banking segment provides private banking, and investment and wealth management services to business owners, entrepreneurs, and senior executives and their families. As of January 14, 2019, the company operated approximately 3,800 offices in 66 countries and territories worldwide. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.

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