FEDERATED HERMES INC (FHI) Stock Fundamental Analysis
NYSE:FHI - New York Stock Exchange, Inc. - US3142111034 - Common Stock - Currency: USD
Taking everything into account, FHI scores 7 out of 10 in our fundamental rating. FHI was compared to 230 industry peers in the Capital Markets industry. FHI gets an excellent profitability rating and is at the same time showing great financial health properties. FHI scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make FHI suitable for value investing!
1. Profitability
1.1 Basic Checks
FHI had positive earnings in the past year.
In the past year FHI had a positive cash flow from operations.
FHI had positive earnings in each of the past 5 years.
FHI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
FHI has a Return On Assets of 17.65%. This is amongst the best in the industry. FHI outperforms 97.83% of its industry peers.
FHI has a Return On Equity of 32.83%. This is amongst the best in the industry. FHI outperforms 96.52% of its industry peers.
FHI has a Return On Invested Capital of 22.88%. This is amongst the best in the industry. FHI outperforms 98.70% of its industry peers.
FHI had an Average Return On Invested Capital over the past 3 years of 16.23%. This is significantly above the industry average of 7.27%.
The 3 year average ROIC (16.23%) for FHI is below the current ROIC(22.88%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.65% | ||
| ROE | 32.83% | ||
| ROIC | 22.88% |
ROA(3y)12.38%
ROA(5y)13.04%
ROE(3y)23.49%
ROE(5y)24.27%
ROIC(3y)16.23%
ROIC(5y)16.25%
1.3 Margins
FHI has a Profit Margin (17.15%) which is in line with its industry peers.
FHI's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 27.37%, FHI perfoms like the industry average, outperforming 49.57% of the companies in the same industry.
FHI's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 95.30%, FHI belongs to the top of the industry, outperforming 95.22% of the companies in the same industry.
In the last couple of years the Gross Margin of FHI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.37% | ||
| PM (TTM) | 17.15% | ||
| GM | 95.3% |
OM growth 3Y-3.42%
OM growth 5Y0.08%
PM growth 3Y-7.67%
PM growth 5Y-4.49%
GM growth 3Y-0.05%
GM growth 5Y-0.31%
2. Health
2.1 Basic Checks
Compared to 1 year ago, FHI has less shares outstanding
The number of shares outstanding for FHI has been reduced compared to 5 years ago.
The debt/assets ratio for FHI is higher compared to a year ago.
2.2 Solvency
FHI has an Altman-Z score of 5.34. This indicates that FHI is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.34, FHI belongs to the top of the industry, outperforming 86.96% of the companies in the same industry.
FHI has a debt to FCF ratio of 1.02. This is a very positive value and a sign of high solvency as it would only need 1.02 years to pay back of all of its debts.
FHI's Debt to FCF ratio of 1.02 is amongst the best of the industry. FHI outperforms 86.09% of its industry peers.
A Debt/Equity ratio of 0.32 indicates that FHI is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.32, FHI is in the better half of the industry, outperforming 74.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.02 | ||
| Altman-Z | 5.34 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 3.04 indicates that FHI has no problem at all paying its short term obligations.
With an excellent Current ratio value of 3.04, FHI belongs to the best of the industry, outperforming 82.17% of the companies in the same industry.
A Quick Ratio of 3.04 indicates that FHI has no problem at all paying its short term obligations.
The Quick ratio of FHI (3.04) is better than 82.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.04 | ||
| Quick Ratio | 3.04 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.85% over the past year.
The Earnings Per Share has been growing slightly by 3.47% on average over the past years.
Looking at the last year, FHI shows a small growth in Revenue. The Revenue has grown by 2.68% in the last year.
The Revenue has been growing slightly by 4.26% on average over the past years.
EPS 1Y (TTM)0.85%
EPS 3Y3.71%
EPS 5Y3.47%
EPS Q2Q%40.45%
Revenue 1Y (TTM)2.68%
Revenue growth 3Y7.92%
Revenue growth 5Y4.26%
Sales Q2Q%6.85%
3.2 Future
Based on estimates for the next years, FHI will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.88% on average per year.
FHI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.49% yearly.
EPS Next Y34.46%
EPS Next 2Y16.5%
EPS Next 3Y12.02%
EPS Next 5Y9.88%
Revenue Next Year5.05%
Revenue Next 2Y4.23%
Revenue Next 3Y4.32%
Revenue Next 5Y2.49%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 11.99, which indicates a very decent valuation of FHI.
Based on the Price/Earnings ratio, FHI is valued a bit cheaper than 63.48% of the companies in the same industry.
FHI is valuated cheaply when we compare the Price/Earnings ratio to 25.91, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 9.83, the valuation of FHI can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FHI indicates a somewhat cheap valuation: FHI is cheaper than 71.30% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.85, FHI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.99 | ||
| Fwd PE | 9.83 |
4.2 Price Multiples
94.35% of the companies in the same industry are more expensive than FHI, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, FHI is valued a bit cheaper than the industry average as 75.65% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.83 | ||
| EV/EBITDA | 5.15 |
4.3 Compensation for Growth
FHI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
FHI has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as FHI's earnings are expected to grow with 12.02% in the coming years.
PEG (NY)0.35
PEG (5Y)3.46
EPS Next 2Y16.5%
EPS Next 3Y12.02%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.17%, FHI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 8.11, FHI has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, FHI pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.17% |
5.2 History
On average, the dividend of FHI grows each year by 15.47%, which is quite nice.
FHI has paid a dividend for at least 10 years, which is a reliable track record.
FHI has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)15.47%
Div Incr Years2
Div Non Decr Years3
5.3 Sustainability
52.75% of the earnings are spent on dividend by FHI. This is a bit on the high side, but may be sustainable.
FHI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP52.75%
EPS Next 2Y16.5%
EPS Next 3Y12.02%
42.56
+0.1 (+0.24%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners81.15%
Inst Owner ChangeN/A
Ins Owners3.85%
Ins Owner Change2.38%
Market Cap3.37B
Analysts68.33
Price Target41.65 (-2.14%)
Short Float %3.3%
Short Ratio2.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.17% |
Yearly Dividend2.22
Dividend Growth(5Y)15.47%
DP52.75%
Div Incr Years2
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)20.36%
Min EPS beat(2)5.9%
Max EPS beat(2)34.82%
EPS beat(4)3
Avg EPS beat(4)-5.65%
Min EPS beat(4)-77.66%
Max EPS beat(4)34.82%
EPS beat(8)6
Avg EPS beat(8)-1%
EPS beat(12)9
Avg EPS beat(12)0.99%
EPS beat(16)11
Avg EPS beat(16)0.21%
Revenue beat(2)1
Avg Revenue beat(2)-0.19%
Min Revenue beat(2)-0.49%
Max Revenue beat(2)0.11%
Revenue beat(4)1
Avg Revenue beat(4)-0.5%
Min Revenue beat(4)-1.18%
Max Revenue beat(4)0.11%
Revenue beat(8)2
Avg Revenue beat(8)0.19%
Revenue beat(12)5
Avg Revenue beat(12)7.54%
Revenue beat(16)6
Avg Revenue beat(16)4.82%
PT rev (1m)0.82%
PT rev (3m)-2.39%
EPS NQ rev (1m)-0.09%
EPS NQ rev (3m)-2.03%
EPS NY rev (1m)6.93%
EPS NY rev (3m)5.92%
Revenue NQ rev (1m)-1.68%
Revenue NQ rev (3m)-1.53%
Revenue NY rev (1m)-1.65%
Revenue NY rev (3m)-1.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.99 | ||
| Fwd PE | 9.83 | ||
| P/S | 1.63 | ||
| P/FCF | 9.83 | ||
| P/OCF | 9.71 | ||
| P/B | 3.13 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.15 |
EPS(TTM)3.55
EY8.34%
EPS(NY)4.33
Fwd EY10.17%
FCF(TTM)4.33
FCFY10.17%
OCF(TTM)4.38
OCFY10.3%
SpS26.04
BVpS13.6
TBVpS-0.79
PEG (NY)0.35
PEG (5Y)3.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.65% | ||
| ROE | 32.83% | ||
| ROCE | 31.69% | ||
| ROIC | 22.88% | ||
| ROICexc | 32.91% | ||
| ROICexgc | 413.75% | ||
| OM | 27.37% | ||
| PM (TTM) | 17.15% | ||
| GM | 95.3% | ||
| FCFM | 16.62% |
ROA(3y)12.38%
ROA(5y)13.04%
ROE(3y)23.49%
ROE(5y)24.27%
ROIC(3y)16.23%
ROIC(5y)16.25%
ROICexc(3y)23.98%
ROICexc(5y)23%
ROICexgc(3y)1021.49%
ROICexgc(5y)802.2%
ROCE(3y)22.48%
ROCE(5y)22.5%
ROICexcg growth 3Y38.23%
ROICexcg growth 5Y38.01%
ROICexc growth 3Y9.02%
ROICexc growth 5Y7%
OM growth 3Y-3.42%
OM growth 5Y0.08%
PM growth 3Y-7.67%
PM growth 5Y-4.49%
GM growth 3Y-0.05%
GM growth 5Y-0.31%
F-Score5
Asset Turnover1.03
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.02 | ||
| Debt/EBITDA | 0.59 | ||
| Cap/Depr | 19.92% | ||
| Cap/Sales | 0.21% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 59.19% | ||
| Profit Quality | 96.9% | ||
| Current Ratio | 3.04 | ||
| Quick Ratio | 3.04 | ||
| Altman-Z | 5.34 |
F-Score5
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)21%
Cap/Depr(5y)28.99%
Cap/Sales(3y)0.35%
Cap/Sales(5y)0.55%
Profit Quality(3y)126.81%
Profit Quality(5y)111.36%
High Growth Momentum
Growth
EPS 1Y (TTM)0.85%
EPS 3Y3.71%
EPS 5Y3.47%
EPS Q2Q%40.45%
EPS Next Y34.46%
EPS Next 2Y16.5%
EPS Next 3Y12.02%
EPS Next 5Y9.88%
Revenue 1Y (TTM)2.68%
Revenue growth 3Y7.92%
Revenue growth 5Y4.26%
Sales Q2Q%6.85%
Revenue Next Year5.05%
Revenue Next 2Y4.23%
Revenue Next 3Y4.32%
Revenue Next 5Y2.49%
EBIT growth 1Y12.71%
EBIT growth 3Y4.23%
EBIT growth 5Y4.35%
EBIT Next Year26.65%
EBIT Next 3Y7.78%
EBIT Next 5Y8.87%
FCF growth 1Y-0.86%
FCF growth 3Y28.89%
FCF growth 5Y1.38%
OCF growth 1Y-0.51%
OCF growth 3Y26.7%
OCF growth 5Y0.69%