I’d waited ages to bag HSBC (LSE: HSBA) shares at a decent discount and on 5 May I finally got my chance.
That morning, I logged on to find the shares had fallen more than 5% as markets reacted badly to its first-quarter results. Immediately, I perked up.
If the HSBC share price had jumped 5%, I wouldn’t have gone anywhere near it. Early spikes often fade as profit takers emerge. But sharp dips can create opportunities, provided the underlying business still looks solid. The more I read HSBC’s numbers, the more confident I felt.
Underlying revenue climbed 4% to $19.1bn, but there were weaker spots. Return on tangible equity slipped from 17.9% to 17.3%, but I wasn’t too concerned. Excluding one-off items, it actually came in at 18.7%. Management also kept existing 2026 guidance intact.
Why did I buy HSBC shares after the dip?
HSBC is a vast organisation with countless moving parts, but I felt the machinery was still pulling in the right direction. I also wondered how long I’d have to wait to get another buying chance like this. With a forward price-to-earnings (P/E) ratio around 11.2 and a forecast dividend yield of 4.6%, the valuation looked attractive to me.
The shares retain bags of momentum. Even after the dip, they’re up more than 50% in a year. So I dived in.
So far the decision has worked out nicely. My shares have already climbed roughly 9%. But these are early days. At The Twelfth Magpie, formerly The Motley Fool UK, we aim to buy shares with a long-term view. I’m talking five, 10, 15, or 20 years and beyond. The real rewards of investing come from years of compounding through both capital growth and dividends. Buying on dips means we start from a lower point.
Should I buy more HSBC shares now?
One reason I like HSBC is its international reach. More than half its revenues come from Asia, giving it exposure to faster-growing markets than the UK alone. It’s also expanding in the Middle East. While it still has significant UK operations, that makes it very different from domestically focused banks such as Lloyds, which I bought three years ago.
As ever, there are risks. HSBC is exposed to the shadow banking sector, and recently suffered a $400m loss from a UK-based fraud case. Chinese growth has slowed. The Hong Kong commercial property sector is struggling and HSBC is exposed. Geopolitical tensions with the US are likely to continue. Net margins remain at the mercy of inflation and interest rate swings. Share buybacks are on hold for now.
I only have one regret about my HSBC purchase. I didn’t buy enough. Now I’m tempted to come back from more in June. The valuation still looks reasonable to me with a forward P/E of 11.6. The forecast yield is 4.46% for 2026 and expected to hit 4.98% in 2027. At some point, I expect buybacks to resume and that should give the shares another lift. So yes, I think HSBC shares are still worth considering today. With a long-term view, of course.
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Harvey Jones owns shares in HSBC Holdings and Lloyds Banking Group.
