That would be quite a significant event for investors, considering that HSBC's shares already have a dividend yield of slightly over 4%. HSBC is headquartered in London. The company had $2.7 trillion in total assets as of March 31 and on Tuesday reported first-quarter earnings of $8.434 billion, increasing from $4.322 billion during the first quarter of 2012. According to Barua, the first-quarter profit before taxes and one-time items was "9% ahead of consensus expectations. The beat against consensus was primarily driven by 38% lower than expected impairments and 4% lower than expected operating expenses." HSBC's first-quarter return on average equity was a solid 14.9%, improving from 6.4% a year earlier.
"Across all lines, we see these results as an endorsement of the strength of the franchise and its ability to generate earnings even in a sluggish macro environment," Barua wrote, adding "We see HSBC as the best Counterparty in global banking today with further upside potential as growth comes back and rates rise."
Barua's price target for HSBC's American Depositary Shares is $64.93. The analyst estimates rates the company "outperform," and estimates the bank will earn $7.49 a share for all of 2013, with EPS increasing to $8.36 in 2014. "Our fundamental long view on HSBC has been based on its unique strategic position of being the only global bank with a strong counterparty rating and strong liquidity both in emerging and developed markets," Barua wrote. The analyst added that "most importantly HSBC today is generating significant levels of cash that it cannot deploy within its risk appetite given the macro environment. Given the fact that the bank has already met its high regulatory capital hurdle, a natural return of cash to shareholders is due. " HBC data by YCharts
Interested in more on HSBC? See TheStreet Ratings' report card for this stock. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn