Contrasting HSBC (NYSE:HSBC) & Texas Community Bancshares (NASDAQ:TCBS)

Texas Community Bancshares (NASDAQ:TCBS) and HSBC (NYSE:HSBC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Profitability

This table compares Texas Community Bancshares and HSBC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Texas Community Bancshares	12.32%	5.83%	0.73%
HSBC	19.59%	14.33%	0.85%

Earnings & Valuation

This table compares Texas Community Bancshares and HSBC”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Texas Community Bancshares	$25.57 million	1.95	$2.84 million	$1.16	14.97
HSBC	$131.35 billion	2.33	$22.29 billion	$7.70	11.58

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

Insider & Institutional Ownership

15.8% of Texas Community Bancshares shares are held by institutional investors. Comparatively, 1.5% of HSBC shares are held by institutional investors. 15.3% of Texas Community Bancshares shares are held by company insiders. Comparatively, 0.0% of HSBC shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Texas Community Bancshares has a beta of -0.01, suggesting that its share price is 101% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.

Dividends

Texas Community Bancshares pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 2.2%. Texas Community Bancshares pays out 20.7% 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. Texas Community Bancshares has increased its dividend for 1 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for Texas Community Bancshares and HSBC, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Texas Community Bancshares	0	1	0	0	2.00
HSBC	2	10	4	0	2.12

HSBC has a consensus target price of $97.00, suggesting a potential upside of 8.80%. Given HSBC’s stronger consensus rating and higher probable upside, analysts clearly believe HSBC is more favorable than Texas Community Bancshares.

Summary

HSBC beats Texas Community Bancshares on 12 of the 17 factors compared between the two stocks.

About Texas Community Bancshares

Texas Community Bancshares, Inc. (NASDAQ: TCBS) is a bank holding company headquartered in Mineola, Texas. The company operates through its wholly owned subsidiary, Mineola Community Bank, SSB, a community-oriented financial institution serving customers in East Texas. Mineola Community Bank provides traditional banking products and services for individuals, families, farmers, and businesses. Its offerings include deposit accounts, consumer and commercial loans, mortgage lending, agricultural financing, and digital banking services.

About HSBC

HSBC Holdings plc is a global banking and financial services company serving individuals, businesses, institutions and governments. Its services include personal and commercial banking, wealth management, private banking, and corporate and investment banking. The company provides products such as deposit accounts, lending, payments, trade finance, foreign exchange and investment services. Its international network supports clients with cross-border banking and financial needs. HSBC traces its origins to the Hongkong and Shanghai Banking Corporation, founded in 1865 to finance trade in Asia.