Comprehensive Stock Comparison
Compare NatWest Group plc (NWG) vs HSBC Holdings plc (HSBC) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | NWG | 101.6% revenue growth vs HSBC's 10.6% |
| Value | HSBC | PEG 0.35 vs 0.85 |
| Quality / Margins | NWG | 16.8% net margin vs HSBC's 16.7% |
| Stability / Safety | HSBC | Beta 0.83 vs NWG's 0.90, lower leverage |
| Dividends | HSBC | 5.0% yield, 4-year raise streak, vs NWG's 3.4% |
| Momentum (1Y) | HSBC | +61.0% vs NWG's +40.9% |
| Efficiency (ROA) | NWG | 0.7% ROA vs HSBC's 0.5%, ROIC 4.6% vs 4.6% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
NatWest Group is a major UK-based banking group providing retail, commercial, and institutional banking services across the United Kingdom and internationally. It generates revenue primarily through net interest income from lending activities (~60% of total income) and fee-based income from banking services, wealth management, and capital markets operations. The company's competitive advantage lies in its entrenched position as one of the UK's largest retail banks with extensive branch networks, established commercial relationships, and government ownership providing stability.
HSBC is a global banking and financial services institution operating across retail, commercial, and investment banking. It generates revenue primarily through net interest income from lending activities (about 60% of total income) and fee-based income from transaction services, wealth management, and investment banking. Its key competitive advantage is its unique global network—particularly its dominant position in Asia and strong connectivity between East and West—which enables cross-border banking services few competitors can match.
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
NWG leads in 3 of 6 categories (Financial Metrics, Valuation Metrics). HSBC leads in 3 (Total Returns, Risk & Volatility).
Financial Metrics (TTM)
HSBC is the larger business by revenue, generating $143.3B annually — 5.0x NWG's $28.6B. Profitability is closely matched — net margins range from 16.8% (NWG) to 16.7% (HSBC).
| Metric | NWGNatWest Group plc | HSBCHSBC Holdings plc |
|---|---|---|
| RevenueTrailing 12 months | $28.6B | $143.3B |
| EBITDAEarnings before interest/tax | $7.9B | $28.6B |
| Net IncomeAfter-tax profit | $5.2B | $17.7B |
| Free Cash FlowCash after capex | $0 | $0 |
| Gross MarginGross profit ÷ Revenue | +51.3% | +47.0% |
| Operating MarginEBIT ÷ Revenue | +21.7% | +22.5% |
| Net MarginNet income ÷ Revenue | +16.8% | +16.7% |
| FCF MarginFCF ÷ Revenue | +2.4% | +42.9% |
| Rev. Growth (YoY)Latest quarter vs prior year | — | — |
| EPS Growth (YoY)Latest quarter vs prior year | +7.1% | -17.6% |
Valuation Metrics
At 11.6x trailing earnings, NWG trades at a 23% valuation discount to HSBC's 15.0x P/E. Adjusting for growth (PEG ratio), HSBC offers better value at 0.46x vs NWG's 0.86x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | NWGNatWest Group plc | HSBCHSBC Holdings plc |
|---|---|---|
| Market CapShares × price | $66.2B | $319.8B |
| Enterprise ValueMkt cap + debt − cash | $29.7B | $277.7B |
| Trailing P/EPrice ÷ TTM EPS | 11.64x | 15.03x |
| Forward P/EPrice ÷ next-FY EPS est. | 11.61x | 11.63x |
| PEG RatioP/E ÷ EPS growth rate | 0.86x | 0.46x |
| EV / EBITDAEnterprise value multiple | 3.04x | 7.63x |
| Price / SalesMarket cap ÷ Revenue | 1.72x | 2.23x |
| Price / BookPrice ÷ Book value/share | 1.33x | 1.79x |
| Price / FCFMarket cap ÷ FCF | 70.87x | 5.21x |
Profitability & Efficiency
NWG delivers a 12.5% return on equity — every $100 of shareholder capital generates $13 in annual profit, vs $9 for HSBC. HSBC carries lower financial leverage with a 1.26x debt-to-equity ratio, signaling a more conservative balance sheet compared to NWG's 1.67x. On the Piotroski fundamental quality scale (0–9), HSBC scores 7/9 vs NWG's 5/9, reflecting strong financial health.
| Metric | NWGNatWest Group plc | HSBCHSBC Holdings plc |
|---|---|---|
| ROE (TTM)Return on equity | +12.5% | +8.9% |
| ROA (TTM)Return on assets | +0.7% | +0.5% |
| ROICReturn on invested capital | +4.6% | +4.6% |
| ROCEReturn on capital employed | +2.7% | +2.6% |
| Piotroski ScoreFundamental quality 0–9 | 5 | 7 |
| Debt / EquityFinancial leverage | 1.67x | 1.26x |
| Net DebtTotal debt minus cash | -$27.1B | -$42.2B |
| Cash & Equiv.Liquid assets | $93.1B | $284.5B |
| Total DebtShort + long-term debt | $65.9B | $242.3B |
| Interest CoverageEBIT ÷ Interest expense | 0.50x | 0.39x |
Total Returns (with DRIP)
A $10,000 investment in HSBC five years ago would be worth $35,948 today (with dividends reinvested), compared to $34,385 for NWG. Over the past 12 months, HSBC leads with a +61.0% total return vs NWG's +40.9%. The 3-year compound annual growth rate (CAGR) favors HSBC at 39.1% vs NWG's 37.0% — a key indicator of consistent wealth creation.
| Metric | NWGNatWest Group plc | HSBCHSBC Holdings plc |
|---|---|---|
| YTD ReturnYear-to-date | -6.8% | +15.8% |
| 1-Year ReturnPast 12 months | +40.9% | +61.0% |
| 3-Year ReturnCumulative with dividends | +156.9% | +169.3% |
| 5-Year ReturnCumulative with dividends | +243.8% | +259.5% |
| 10-Year ReturnCumulative with dividends | +199.7% | +267.7% |
| CAGR (3Y)Annualised 3-year return | +37.0% | +39.1% |
Risk & Volatility
HSBC is the less volatile stock with a 0.83 beta — it tends to amplify market swings less than NWG's 0.90 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. HSBC currently trades 98.3% from its 52-week high vs NWG's 85.7% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | NWGNatWest Group plc | HSBCHSBC Holdings plc |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.90x | 0.83x |
| 52-Week HighHighest price in past year | $19.36 | $94.80 |
| 52-Week LowLowest price in past year | $10.40 | $45.66 |
| % of 52W HighCurrent price vs 52-week peak | +85.7% | +98.3% |
| RSI (14)Momentum oscillator 0–100 | 48.7 | 69.1 |
| Avg Volume (50D)Average daily shares traded | 2.6M | 1.8M |
Analyst Outlook
Wall Street rates NWG as "Buy" and HSBC as "Hold". For income investors, HSBC offers the higher dividend yield at 4.96% vs NWG's 3.43%.
| Metric | NWGNatWest Group plc | HSBCHSBC Holdings plc |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Hold |
| Price TargetConsensus 12-month target | — | $52.00 |
| # AnalystsCovering analysts | 6 | 19 |
| Dividend YieldAnnual dividend ÷ price | +3.4% | +5.0% |
| Dividend StreakConsecutive years of raises | 1 | 4 |
| Dividend / ShareAnnual DPS | $0.42 | $4.63 |
| Buyback YieldShare repurchases ÷ mkt cap | +5.5% | +3.7% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| NatWest Group plc (NWG) | 100 | 385.66 | +285.7% |
| HSBC Holdings plc (HSBC) | 100 | 265.32 | +165.3% |
HSBC Holdings plc (HSBC) returned +259% over 5 years vs NatWest Group plc (NWG)'s +244%. A $10,000 investment in HSBC 5 years ago would be worth $35,948 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2015 | 2024 | Change |
|---|---|---|---|
| NatWest Group plc (NWG) | $16.1B | $28.6B | +77.5% |
| HSBC Holdings plc (HSBC) | $87.2B | $143.3B | +64.4% |
NatWest Group plc's revenue grew from $16.1B (2015) to $28.6B (2024) — a 6.6% CAGR. HSBC Holdings plc's revenue grew from $87.2B (2015) to $143.3B (2024) — a 5.7% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2015 | 2024 | Change |
|---|---|---|---|
| NatWest Group plc (NWG) | -9.9% | 16.8% | +269.7% |
| HSBC Holdings plc (HSBC) | 15.5% | 16.7% | +7.9% |
NatWest Group plc's net margin went from -10% (2015) to 17% (2024). HSBC Holdings plc's net margin went from 16% (2015) to 17% (2024).
Chart 4P/E Ratio History — 8 Years
| Stock | 2017 | 2024 | Change |
|---|---|---|---|
| NatWest Group plc (NWG) | 58.8 | 9.6 | -83.7% |
| HSBC Holdings plc (HSBC) | 21.5 | 8 | -62.8% |
NatWest Group plc has traded in a 6x–59x P/E range over 7 years; current trailing P/E is ~12x. HSBC Holdings plc has traded in a 7x–27x P/E range over 8 years; current trailing P/E is ~15x.
Chart 5EPS Growth — 10 Years
| Stock | 2015 | 2024 | Change |
|---|---|---|---|
| NatWest Group plc (NWG) | -0.36 | 1.06 | +394.4% |
| HSBC Holdings plc (HSBC) | 3.2 | 6.2 | +93.8% |
NatWest Group plc's EPS grew from $-0.36 (2015) to $1.06 (2024). HSBC Holdings plc's EPS grew from $3.20 (2015) to $6.20 (2024) — a 8% CAGR.
Chart 6Free Cash Flow — 5 Years
NatWest Group plc generated $694M FCF in 2024 (-99% vs 2021). HSBC Holdings plc generated $61B FCF in 2024 (-39% vs 2021).
NWG vs HSBC: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is NWG or HSBC a better buy right now?
NatWest Group plc (NWG) offers the better valuation at 11.6x trailing P/E (11.6x forward), making it the more compelling value choice. Analysts rate NatWest Group plc (NWG) a "Buy" — based on 6 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — NWG or HSBC?
On trailing P/E, NatWest Group plc (NWG) is the cheapest at 11.6x versus HSBC Holdings plc at 15.0x. On forward P/E, NatWest Group plc is actually cheaper at 11.6x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: HSBC Holdings plc wins at 0.35x versus NatWest Group plc's 0.85x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — NWG or HSBC?
Over the past 5 years, HSBC Holdings plc (HSBC) delivered a total return of +259.5%, compared to +243.8% for NatWest Group plc (NWG). A $10,000 investment in HSBC five years ago would be worth approximately $36K today (assuming dividends reinvested). Over 10 years, the gap is even starker: HSBC returned +267.7% versus NWG's +199.7%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — NWG or HSBC?
By beta (market sensitivity over 5 years), HSBC Holdings plc (HSBC) is the lower-risk stock at 0.83β versus NatWest Group plc's 0.90β — meaning NWG is approximately 9% more volatile than HSBC relative to the S&P 500. On balance sheet safety, HSBC Holdings plc (HSBC) carries a lower debt/equity ratio of 126% versus 167% for NatWest Group plc — giving it more financial flexibility in a downturn.
05Which has better profit margins — NWG or HSBC?
NatWest Group plc (NWG) is the more profitable company, earning 16.8% net margin versus 16.7% for HSBC Holdings plc — meaning it keeps 16.8% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: HSBC leads at 22.5% versus 21.7% for NWG. At the gross margin level — before operating expenses — NWG leads at 51.3%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is NWG or HSBC more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, HSBC Holdings plc (HSBC) is the more undervalued stock at a PEG of 0.35x versus NatWest Group plc's 0.85x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, NatWest Group plc (NWG) trades at 11.6x forward P/E versus 11.6x for HSBC Holdings plc — 0.0x cheaper on a one-year earnings basis.
07Which pays a better dividend — NWG or HSBC?
All stocks in this comparison pay dividends. HSBC Holdings plc (HSBC) offers the highest yield at 5.0%, versus 3.4% for NatWest Group plc (NWG).
08Is NWG or HSBC better for a retirement portfolio?
For long-horizon retirement investors, HSBC Holdings plc (HSBC) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.83), 5.0% yield, +267.7% 10Y return). Both have compounded well over 10 years (HSBC: +267.7%, NWG: +199.7%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between NWG and HSBC?
Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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