Image Source: Pexels
 

HSBC Holdings PLC, bearing the ticker symbol HSBC, has previously been reviewed as a candidate for one or more of my portfolios. This, however, is its first mention for Viking.

Established in 1865 in Hong Kong, London-based HSBC is one of the largest banks in the world with assets of US $3 trillion and 40 million customers worldwide.

It operates across 64 countries with around 220,000 full-time staff. Key regions include Asia, Europe, the Middle East and North Africa, and North America.

United Kingdom and Hong Kong are the two largest markets for the bank. The bank offers retail, commercial, and institutional banking, global banking and markets, wealth management, and private banking.

Three key data points gauge HSBC Holdings PLC, or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.
 

HSBC Price

Over the past year, HSBC share price rose about 17.85% from $33.00 to $38.89 as of Wednesday’s market close.

If HSBC stock trades in the range of $25.00 to $50.00 this next year, its recent $38.89 share price might rise to $46.00 by next year. Of course, HSBC’s price could drop about the same $7.11 amount, or more.

My upside estimate of $7.11 is $3.99 below the median of annual target price estimates from two analysts covering the stock for brokers.
 

HSBC Dividend

HSBC Holdings PLC’s recent $0.50 variable quarterly dividend, paid June 23rd to shareholders of record May 11th, equates to $2.12 annually and throws a yield of 5.45% as of Wednesday’s closing price.
 

HSBC Returns

Adding the $2.12 anticipated annual dividend to HSBC’s $7.11 price upside reveals a $9.23 potential gross gain per share for the coming year.

At Wednesday’s $38.89 closing price, a little over $1000 would buy 26 shares.

A $10 broker fee (if charged), paid half at purchase and half at the sale, might cost us about $0.38 per share.

Subtracting that maybe $0.38 brokerage cost from my estimated $9.23 gross gain per share makes a net gain amounting to $8.85 X 26 shares = $230.10 for a 23% net gain.

This may be the time to pounce on HSBC. But beware, its dividend is stable and its price is low and is priced at over one-third of the stock’s all-time $99.52 high posted October 31, 2007.

The foregoing article is based on past history of HSBC Holdings PLC. The only accurate measure of future performance is from active investment in the company.

More By This Author:

Daily Stock Analysis: F.N.B. Corporation
Daily Stock Analysis: United Bankshares (USBI)
Daily Stock Analysis: Associated Banc-Corp (ASB)