HSBC vs Lloyds Banking Which Performs Better?

HSBC and Lloyds Banking Group are two major players in the UK banking industry. HSBC, a global banking giant, offers a diverse range of financial services to customers worldwide. On the other hand, Lloyds Banking Group is one of the largest retail banks in the UK, catering primarily to domestic customers. Both banks have faced challenges in recent years, including regulatory scrutiny and economic uncertainty. Investors may consider factors such as financial performance, strategic direction, and market volatility when comparing the two stocks.

HSBC or Lloyds Banking?

When comparing HSBC and Lloyds Banking, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between HSBC and Lloyds Banking.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. HSBC has a dividend yield of 8.5%, while Lloyds Banking has a dividend yield of 7.03%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. HSBC reports a 5-year dividend growth of 0.62% year and a payout ratio of 0.00%. On the other hand, Lloyds Banking reports a 5-year dividend growth of -4.91% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with HSBC P/E ratio at 7.39 and Lloyds Banking's P/E ratio at 6.46. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. HSBC P/B ratio is 0.90 while Lloyds Banking's P/B ratio is 0.70.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, HSBC has seen a 5-year revenue growth of -0.10%, while Lloyds Banking's is -0.76%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with HSBC's ROE at 12.87% and Lloyds Banking's ROE at 11.57%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $47.95 for HSBC and $2.68 for Lloyds Banking. Over the past year, HSBC's prices ranged from $36.93 to $48.45, with a yearly change of 31.19%. Lloyds Banking's prices fluctuated between $2.00 and $3.24, with a yearly change of 62.00%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.