HSBC (LSE: HSBA) shares have been on an absolute tear. They’re up a staggering 330% in five years, with dividends on top.
If this was the next big US tech hope, investors would be all over it. But it’s not. It’s a boring old FTSE 100 financials stock, the type that were supposed to be out of fashion
There’s nothing boring about HSBC, which is now the UK’s biggest listed company with a market-cap of £266bn, and has a massive global opportunity, particularly in Asia. Today, just 18% of HSBC’s revenue comes from the UK.
This FTSE 100 stock’s massive
Like every bank, it’s benefited from higher interest rates, which have helped it widen net interest margins. HSBC makes an awful lot of money – just look at recently pre-tax profits. The small dip in 2025 was mostly due to one-off impairments.
- 2025 – $29.9bn
- 2024 – $32.3bn
- 2023 – $30.3bn
- 2022 – $17.5bn
- 2021 – $18.9bn
After such a run, the obvious question is whether the investors have left it too late to share in the bank’s success. I answered that question on 5 May. The shares dipped 5% after a 1% drop in Q1 reported profit before tax to £9.4bn. Revenue still grew 4% to $19.1bn. Encouraged, I filled my boots.
I’m glad I took my chance. The HSBC share price is up around 18% since, and Q2 numbers (4 August) were dramatically stronger. Revenue rose 16% to $19.1bn while reported profit before tax jumped 60% to $10.1bn.
The board also restarted share buybacks, which it had paused to complete the purchase of Hong Kong’s Hang Seng Bank. The new buyback programme is worth up to $1bn, although that’s well below the $6bn of buybacks completed across 2025.
There are risks. China’s property market remains troubled and Beijing is clamping down on mainland Chinese residents investing in Hong Kong. A global downturn could also hit revenues and drive up bad debts, while the shadow banking system remains a worry. Then there’s the valuation.
Is the stock too pricey?
Trading at a price-to-earnings ratio of around 17 times, HSBC’s no longer cheap, while the trailing dividend yield has shrunk to 3.6%. Both are down to its flying share price, and a sign of success. The forward P/E of 12.6 looks more attractive and the forecast yield is 4.1% for 2026 and 4.6% for 2027.
Yet brokers are wary. The consensus one-year share price target is around 1,520p. If correct, that’s actually 2.2% below the current 1,555p. That wouldn’t surprise me. HSBC shares have been red hot, but there’s always a chance they’ll come come off the boil.
This is still a terrific stock. I think the shares are worth considering for both dividend income and share price growth over the longer run. Markets could be bumpy this autumn, and it could be one to buy on a dip. Yet there’s an even better income stock on my radar right now…
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Harvey Jones owns shares in HSBC.
