Is HSBC a good bank dividend stock to buy?

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HSBC (LON: HSBA) share price drifted upwards this week as investors reflected on the relatively positive bank earnings from the United States. The stock rose to a high of 475p, which was the highest level since October 7. It has risen by almost 8% from the lowest level this month.

How safe is HSBC dividend?

HSBC share price has done well recently after American banks published strong quarterly results. This includes companies like Goldman Sachs, JP Morgan, and Bank of America. One of the top bank news of the week was that Goldman Sachs was re-organizing its business as its consumer business lagged.

HSBC and other UK banking stocks like Lloyds, Barclays, and Natwest did well because of the close correlation among global banks. Analysts believe that they too will publish strong results later this month.

Meanwhile, HSBC was in the spotlight after UK’s advertising watchdog banned a series of its advertisements. The Advertising Standards Authority said that HSBC was greenwashing by showing ads focused on tree planting and its plans to reach net zero. This advertisement ban will have no implication on the stock.

HSBC share price has generally outperformed the broader banking ETF this year because of its strong market share in Asia. The firm has a strong market share in Hong Kong and is seeing to grow its Chinese business.

The stock has also done well because of the company’s business strategy of increasing its focus in Asia. For example, there are rumours that HSBC is considering selling his Canadian business. It has already sold its American and French subsidiaries.

HSBC also has a strong dividend. It has a dividend yield of 4.57% and it aims to have a payout ratio of 50% in 2023. It has a strong balance sheet, with a core tier-one ratio of 13.1 and a price-to-book ratio of 0.6. This means it has room to grow its dividend.

HSBC share price forecast

The daily chart shows that the HSBC stock price has been in a strong bearish trend in the past few days. This decline continued when the stock dropped below the lower side of the rising wedge pattern. It has then moved below the 25-day and 50-day moving averages. The Relative Strength Index (RSI) has moved above the oversold level. 

Therefore, there is a likelihood that the stock will continue rising as bulls target the next key resistance at 520p, which was the lowest level of the rising wedge pattern. A drop below the support at 450p will invalidate the bearish view. 

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