HSBC Holdings plc (NYSE:HSBC) released its earnings on Monday that saw overall operating income for the first half of the year drop by over 8%, from $35 billion in 2016 to $32 billion this year. Despite the drop in revenue the company was able to post a profit of $10.2 billion which is up over 5% from last year’s $9.7 billion and beat estimates of $9.5 billion.
The company was able to pull out a profit by achieving cost savings in employee compensation of $674 million (7.2% reduction), general and administrative expenses of $567 million (7.5% reduction), and amortization and impairment of intangible assets of $906 million (75% reduction).
Overall earnings per share was $0.35 for the year-to-date results, up from $0.32 last year.
The company also announced it would be buying back $2 billion in shares in the last half of the year. This will help push the stock’s value further up, one that is already up 49% over the past 12 months and year-to-date is up over 21%. The stock also currently offers a strong dividend yield of over 5% that is paid out quarterly.
HSBC is the largest bank in Europe and presents an opportunity for investors to diversify away from banks that are more heavily weighted in North American markets. The stock offers a very good dividend and has already appreciated a lot in value over the past year, the only question is if it can continue at that pace or if is due for a correction. However, with a 5% dividend the stock does offer some buffer for investors in case there is a bit of decline.
