HSBC yields 6.9%! Why I’d still buy this fast-growth bank instead

first_img Tom Rodgers has no position in the shares mentioned. The Motley Fool UK has recommended HSBC Holdings. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Tom Rodgers | Friday, 31st January, 2020 | More on: HSBA STB Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. If little green men came down from Mars to take a look at the FTSE 100, they might be confused as to why HSBC (LSE:HSCA) gets far fewer investing headlines than rivals like Lloyds or Barclays.After all, the big bank has long been one of the FTSE 100’s largest dividend payers, second only to Shell for the last five years.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…And for income investors or those nearing retirement, being able to rely on regular dividend payouts is paramount. HSBC reports earnings and pays out dividends in US dollars, so the weakness of sterling has seriously boosted its numbers in recent years.All in on divisUntil the financial crisis of 2007–08 HSBC’s dividend growth topped more than 10% a year.Two bad years saw dividends plummet by 29% and 39%. From 2015 to 2018 full-year dividends have been stuck at $0.51 per share with no dividend growth at all. And yet at current count the £115bn banking giant pays out a whopping 6.9% yield.That figure has been aided by the fact that since a January 2018 peak the share price has been dropping steadily. It has lost 15% of its value in the last six months, and is trading around the 560p mark as I write. The shares are now trading for a low earnings multiple of 11.7, which is cheap by anyone’s metric.Over the last five years HSBC’s earnings per share have fallen by around 5% a year, which isn’t the end of the world by any means. However nearly 80% of profits were paid out as dividends in the last 12 months, up from 73% the year before. Dividend cover moved back into the black in 2018, but only just, at 1.2 times earnings, so there is little room for manoeuvre here if earnings don’t improve.Secure, trust meAn alternative option for those seeking strong dividends with better growth could be AIM-listed £295m market cap retail bank Secure Trust Bank (LSE:STB).The Solihull-based group focus on savings, loans to real estate developers, and, through its V12 and Moneyway brands, car finance for the automotive sector.A 5.3% dividend yield certainly looks attractive, especially on a price-to-earnings ratio of 9.8, and further good news is that between 2017 and 2018 pre-tax profits climbed from £25m to £34.7m. Earnings per share over the same period leapt 39% from 116.4p to 161.8p. City analysts believe EPS here has the potential to skyrocket to 241p by 2021, too.STB pays out around 51% of its earnings as dividends, which in comparison with HSBC appears more sustainable for the longer term.I also like the fact that Secure shareholders have not had their holdings diluted by large share issues, which can be a problem in the AIM market where companies need to continually raise funds to stay afloat.Chief executive Paul Lynam told investors full-year results this time around would be in line with expectations and the bank was looking forward with “cautious optimism” given its “strong new business pipelines, healthy capital and liquidity positions“.Institutions and public companies currently make up 94% of shareholders. I’d suggest becoming part of the 6% of private investors to take a stake in STB would be a sound move. Enter Your Email Address Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! HSBC yields 6.9%! Why I’d still buy this fast-growth bank instead “This Stock Could Be Like Buying Amazon in 1997”center_img Our 6 ‘Best Buys Now’ Shares I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. See all posts by Tom Rodgers Image source: Getty Images I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. 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