HSBC Holdings plc (HSBC) vs Wells Fargo & Company (WFC)

HSBC Holdings plc and Wells Fargo & Company are both Banks Diversified companies. HSBC Holdings plc is the larger, with a market value of $345.5B against $248.6B — 1.4× the size. Wells Fargo & Company trades at the lower P/E: 11.9× against 14.2×. Wells Fargo & Company grew revenue faster over the last twelve months: 5.33% against −21.2%. HSBC Holdings plc has the higher net margin (61.9% vs 16.8%) and the higher return on invested capital (0.00% vs 0.00%). Both pay a dividend; HSBC Holdings plc yields more (8.17% vs 3.05%). Across the 19 metrics below, Wells Fargo & Company leads on 11 and HSBC Holdings plc on 8.

Valuation

Metric HSBC WFC Banks Diversified median
P/E 14.22 11.92 13.67
P/S 8.61 1.96 2.72
P/B 1.75 1.51 1.69
Price to free cash flow 2.39 13.27 4.53
EV/EBITDA n/m n/m —
EV/Sales (15.53) (1.69) —
Earnings yield 7.03% 8.39% 7.33%
Free cash flow yield 41.81% 7.53% 7.63%

Profitability

Metric HSBC WFC Banks Diversified median
Gross margin 100.00% 67.36% 67.18%
Operating margin 0.00% 0.00% 0.00%
Net margin 61.91% 16.78% 18.44%
Free cash flow margin 0.00% 14.88% 1.96%
Return on equity 0.00% 12.97% 11.14%
Return on assets 0.00% 1.01% 0.74%
Return on invested capital 0.00% 0.00% 0.00%

Growth

Metric HSBC WFC Banks Diversified median
Revenue growth (TTM) (21.23%) 5.33% 4.67%
EPS growth (last fiscal year) (2.42%) 16.57% —
Revenue growth, 5-year CAGR 15.19% 8.48% 14.34%
Net income growth, 5-year CAGR 40.18% 62.58% 10.77%

Health

Metric HSBC WFC Banks Diversified median
Debt to equity 0.67 1.00 1.39
Current ratio 0.85 0.90 0.87
Net debt to EBITDA 0.00 0.00 0.00

Dividend

Metric HSBC WFC Banks Diversified median
Dividend yield 8.17% 3.05% 3.80%
Payout ratio 0.35 0.30 0.31

Size

Metric HSBC WFC Banks Diversified median
Market cap 345.54b 248.57b 186.46b

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