HSBC (NYSE:HSBC – Get Rating) and AMB Financial (OTCMKTS:AMFC – Get Rating) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, profitability and risk.
Profitability
This table compares HSBC and AMB Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| HSBC | 24.02% | 7.57% | 0.50% |
| AMB Financial | N/A | N/A | N/A |
Valuation and Earnings
This table compares HSBC and AMB Financial’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| HSBC | $74.18 billion | 1.87 | $16.04 billion | $3.68 | 9.56 |
| AMB Financial | N/A | N/A | N/A | N/A | N/A |
Insider and Institutional Ownership
1.3% of HSBC shares are owned by institutional investors. Comparatively, 1.2% of AMB Financial shares are owned by institutional investors. 0.0% of HSBC shares are owned by company insiders. Comparatively, 37.7% of AMB Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Dividends
HSBC pays an annual dividend of $1.59 per share and has a dividend yield of 4.5%. AMB Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. HSBC pays out 43.2% of its earnings in the form of a dividend. HSBC has increased its dividend for 1 consecutive years. HSBC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of recent ratings for HSBC and AMB Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| HSBC | 0 | 4 | 4 | 0 | 2.50 |
| AMB Financial | 0 | 0 | 0 | 0 | N/A |
Volatility and Risk
HSBC has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, AMB Financial has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.
Summary
HSBC beats AMB Financial on 9 of the 11 factors compared between the two stocks.
About HSBC
HSBC Holdings plc provides banking and financial services worldwide. The company operates through Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets segments. The Wealth and Personal Banking segment offers retail banking and wealth products, including current and savings accounts, mortgages and personal loans, credit and debit cards, and local and international payment services; and wealth management services comprising insurance and investment products, global asset management services, investment management, and private wealth solutions. This segment serves personal banking and high net worth individuals. The Commercial Banking segment provides credit and lending, treasury management, payment, cash management, commercial insurance, and investment services; commercial cards; international trade and receivables finance services; foreign exchange products; capital raising services on debt and equity markets; and advisory services. It serves small and medium sized enterprises, mid-market enterprises, and corporates. The Global Banking and Markets segment offers financing, advisory, and transaction services; and credit, rates, foreign exchange, equities, money markets, and securities services; and engages in principal investment activities. It serves government, corporate and institutional clients, and private investors. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.
About AMB Financial
AMB Financial Corp. is a holding company of American Community Bank of Indiana, which engages in the provision of financial services. The firm offers personal and business banking. It is also involved in the business of attracting deposits from the general public and using such deposits to originate residential and commercial mortgage loans as well as other types of consumer and commercial loans. The company was founded on March 29, 1910 and is headquartered in St. John, IN.
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