Overall FHI gets a fundamental rating of 6 out of 10. We evaluated FHI against 237 industry peers in the Capital Markets industry. Both the health and profitability get an excellent rating, making FHI a very profitable company, without any liquidiy or solvency issues. FHI is valued correctly, but it does not seem to be growing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year FHI was profitable.
In the past year FHI had a positive cash flow from operations.
Of the past 5 years FHI 4 years were profitable.
FHI had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

FHI has a better Return On Assets (16.68%) than 95.78% of its industry peers.
The Return On Equity of FHI (30.66%) is better than 95.78% of its industry peers.
Looking at the Return On Invested Capital, with a value of 18.60%, FHI belongs to the top of the industry, outperforming 94.51% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for FHI is significantly above the industry average of 7.27%.
The 3 year average ROIC (16.23%) for FHI is below the current ROIC(18.60%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	16.68%
ROE	30.66%
ROIC	18.6%

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 (20.80%) which is comparable to the rest of the industry.
FHI's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 28.35%, FHI is in line with its industry, outperforming 56.54% of the companies in the same industry.
In the last couple of years the Operating Margin of FHI has remained more or less at the same level.
The Gross Margin of FHI (95.56%) is better than 96.20% of its industry peers.
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	28.35%
PM (TTM)	20.8%
GM	95.56%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

There is no outstanding debt for FHI. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

FHI has an Altman-Z score of 5.27. This indicates that FHI is financially healthy and has little risk of bankruptcy at the moment.
FHI's Altman-Z score of 5.27 is amongst the best of the industry. FHI outperforms 86.08% of its industry peers.
The Debt to FCF ratio of FHI is 1.34, which is an excellent value as it means it would take FHI, only 1.34 years of fcf income to pay off all of its debts.
FHI has a Debt to FCF ratio of 1.34. This is amongst the best in the industry. FHI outperforms 88.61% of its industry peers.
FHI has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
FHI has a Debt to Equity ratio of 0.29. This is in the better half of the industry: FHI outperforms 73.42% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.29
Debt/FCF	1.34
Altman-Z	5.27

ROIC/WACCN/A

WACCN/A

2.3 Liquidity

FHI has a Current Ratio of 3.13. This indicates that FHI is financially healthy and has no problem in meeting its short term obligations.
FHI has a Current ratio of 3.13. This is amongst the best in the industry. FHI outperforms 81.43% of its industry peers.
FHI has a Quick Ratio of 3.13. This indicates that FHI is financially healthy and has no problem in meeting its short term obligations.
FHI has a Quick ratio of 3.13. This is amongst the best in the industry. FHI outperforms 81.43% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.13
Quick Ratio	3.13

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 61.13% over the past year.
Measured over the past years, FHI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.87% on average per year.

EPS 1Y (TTM)61.13%

EPS 3Y20.61%

EPS 5Y9.87%

EPS Q2Q%33.65%

Revenue 1Y (TTM)N/A

Revenue growth 3YN/A

Revenue growth 5YN/A

Sales Q2Q%13.69%

3.2 Future

The Earnings Per Share is expected to grow by 5.75% on average over the next years.
Based on estimates for the next years, FHI will show a small growth in Revenue. The Revenue will grow by 1.75% on average per year.

EPS Next Y-0.3%

EPS Next 2Y5.55%

EPS Next 3Y3.3%

EPS Next 5Y5.75%

Revenue Next Year7.65%

Revenue Next 2Y5.9%

Revenue Next 3Y2.91%

Revenue Next 5Y1.75%

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 decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 10.37 indicates a reasonable valuation of FHI.
66.67% of the companies in the same industry are more expensive than FHI, based on the Price/Earnings ratio.
FHI's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.30.
The Price/Forward Earnings ratio is 10.40, which indicates a very decent valuation of FHI.
Based on the Price/Forward Earnings ratio, FHI is valued a bit cheaper than the industry average as 72.57% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 25.57. FHI is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	10.37
Fwd PE	10.4

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, FHI is valued cheaper than 91.98% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, FHI is valued a bit cheaper than the industry average as 68.35% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	15.94
EV/EBITDA	7.08

4.3 Compensation for Growth

The decent profitability rating of FHI may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)1.05

EPS Next 2Y5.55%

EPS Next 3Y3.3%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.57%, FHI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.88, FHI has a dividend in line with its industry peers.
FHI's Dividend Yield is a higher than the S&P500 average which is at 1.82.

		Industry Rank	Sector Rank
Dividend Yield	2.57%

5.2 History

On average, the dividend of FHI grows each year by 15.47%, which is quite nice.
FHI has been paying a dividend for at least 10 years, so it has 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

FHI pays out 28.50% of its income as dividend. This is a sustainable payout ratio.
FHI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.

DP28.5%

EPS Next 2Y5.55%

EPS Next 3Y3.3%

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FEDERATED HERMES INC / FHI FAQ

Can you provide the ChartMill fundamental rating for FEDERATED HERMES INC?

ChartMill assigns a fundamental rating of 6 / 10 to FHI.

What is the valuation status for FHI stock?

ChartMill assigns a valuation rating of 6 / 10 to FEDERATED HERMES INC (FHI). This can be considered as Fairly Valued.

How profitable is FEDERATED HERMES INC (FHI) stock?

FEDERATED HERMES INC (FHI) has a profitability rating of 7 / 10.

What is the valuation of FEDERATED HERMES INC based on its PE and PB ratios?

The Price/Earnings (PE) ratio for FEDERATED HERMES INC (FHI) is 10.37 and the Price/Book (PB) ratio is 3.48.

Is the dividend of FEDERATED HERMES INC sustainable?

The dividend rating of FEDERATED HERMES INC (FHI) is 5 / 10 and the dividend payout ratio is 28.5%.