HSBC vs NatWest Which Should You Buy?

Both HSBC and NatWest are major players in the banking and financial services industry, with a global presence and a long-standing reputation for stability and reliability. As publicly traded companies, their stocks are closely watched by investors for indicators of the overall health and performance of the banking sector. HSBC, with operations in more than 60 countries, has a strong focus on international markets, while NatWest, as a UK-based bank, is closely tied to the local economy. Investors often compare these two stocks for their potential for growth and stability in the ever-changing financial landscape.

HSBC or NatWest?

When comparing HSBC and NatWest, 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 NatWest.

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 8.4%, while NatWest has a dividend yield of 5.41%. 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, NatWest reports a 5-year dividend growth of 59.37% 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 7.48 and NatWest's P/E ratio at 15.44. 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 0.92 while NatWest's P/B ratio is 1.91.

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 NatWest's is -0.38%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with HSBC's ROE at 12.87% and NatWest's ROE at 13.30%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $48.29 for HSBC and $10.30 for NatWest. Over the past year, HSBC's prices ranged from $36.93 to $48.76, with a yearly change of 32.02%. NatWest's prices fluctuated between $5.16 and $10.75, with a yearly change of 108.33%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.