You are here: Home - Investing - Experienced Investor - News -

Stock of the Week: HSBC

0
Written by:
19/11/2018
Helal Miah, investment research analyst at The Share Centre, picks the UK’s largest bank as stock of the week.

This week’s share of the week is the UK’s largest listed bank HSBC. The new senior management team are trying to steer the bank to growth once again and their comments so far are fairly positive. HSBC will focus on driving further revenue growth from Asia while also expanding its wealth management and insurance business.

It has a mix of business and geographical spread, and is keen to promote the pivot to Asia strategy, which they hope in the long run, will see them emerge from a difficult period for the sector. Around 43% of profit now comes from Hong Kong and the group is set to invest more (around $17bn) in China, especially in the Pearl River Delta region and in technology.

In the interim results in August the CEO stated that he was cautiously optimistic for global growth. Revenue for the period rose by 4% to $27.3bn. The pre-tax profit rose to $10.7bn ($10.2bn). Rising costs, up by 7%, were again a concern, when compared to revenue growth.

An update in October gave the shares a much needed boost, as profits for the third quarter of $3.9bn, beat expectations; there was also growth across all of its three main businesses and costs were lower than in the previous quarter.

With dollar interest rates rising and wobbles in the global stock markets and with the Brexit decision ever still uncertain, investors should naturally be cautious. However, recent results combined with management commentary do not reflect this. HSBC is a significant dividend payer with the yield currently in excess of 6%, moreover, we believe that HSBC is less prone to Brexit-related issues than other main UK listed banks.

We believe that investors in this type of company, as in those looking for income at a relatively low to medium level of risk, should look past these short term wobbles and stay invested in solid income paying stocks for the long term. We therefore continue with our ‘buy’ recommendation on HSBC.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week