Contrasting Credit Agricole (OTCMKTS:CRARY) & HSBC (NYSE:HSBC)

Credit Agricole (OTCMKTS:CRARY) and HSBC (NYSE:HSBC) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Profitability

This table compares Credit Agricole and HSBC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Credit Agricole	24.65%	37.56%	1.35%
HSBC	16.07%	13.10%	0.82%

Institutional & Insider Ownership

0.6% of Credit Agricole shares are owned by institutional investors. Comparatively, 1.5% of HSBC shares are owned by institutional investors. 0.0% of HSBC shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Credit Agricole and HSBC, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Credit Agricole	0	4	1	0	2.20
HSBC	0	4	5	1	2.70

HSBC has a consensus target price of $63.00, suggesting a potential downside of 29.75%. Given HSBC’s stronger consensus rating and higher possible upside, analysts plainly believe HSBC is more favorable than Credit Agricole.

Dividends

Credit Agricole pays an annual dividend of $0.40 per share and has a dividend yield of 4.0%. HSBC pays an annual dividend of $8.98 per share and has a dividend yield of 10.0%. Credit Agricole pays out 33.6% of its earnings in the form of a dividend. HSBC pays out 148.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Credit Agricole and HSBC”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Credit Agricole	$31.76 billion	1.89	$8.00 billion	$1.19	8.33
HSBC	$131.35 billion	2.35	$22.29 billion	$6.05	14.82

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

Volatility and Risk

Credit Agricole has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Summary

HSBC beats Credit Agricole on 12 of the 17 factors compared between the two stocks.

About Credit Agricole

Crédit Agricole S.A. provides retail, corporate, insurance, and investment banking products and services in France and internationally. It operates through French Retail Banking Regional Banks; French Retail Banking – LCL; International Retail Banking; Asset Gathering; Large Customers; and Specialised Financial Services segments. The company offers banking products and services, finance, savings, wealth management, payment, and cash flow management services; consumer finance products; savings/retirement, death and disability/creditor/group, and property and casualty insurance products; investment solutions; and banking and specialized financial services. It also provides investment banking, structured finance, international trade finance, commercial banking, capital market, and syndication services; financing solutions for property and equipment investment and renewal requirements; trade receivable financing and management solutions for corporates; asset servicing solutions for investment products, as well as various asset classes, such as execution, clearing, forex, security lending and borrowing, custody, depositary bank, fund administration, middle-office outsourcing solutions, and fund distribution support and issuer services; and online banking services. The company serves retail customers, corporates, banks and financial institutions, government agencies, and local authorities. Crédit Agricole S.A. was founded in 1894 and is headquartered in Montrouge, France. Crédit Agricole S.A. operates as a subsidiary of SAS Rue La Boetie.

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.