FEDERATED HERMES INC (FHI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:FHI - US3142111034 - Common Stock
52.3 USD
-1.11 (-2.08%)
We assign a fundamental rating of 7 out of 10 to FHI. FHI was compared to 237 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 is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings could make FHI a good candidate for value and quality investing.
1. Profitability
1.1 Basic Checks
- FHI had positive earnings in the past year.
- FHI had a positive operating cash flow in the past year.
- FHI had positive earnings in each of the past 5 years.
- Each year in the past 5 years FHI had a positive operating cash flow.
1.2 Ratios
- With an excellent Return On Assets value of 16.68%, FHI belongs to the best of the industry, outperforming 95.78% of the companies in the same industry.
- With an excellent Return On Equity value of 30.66%, FHI belongs to the best of the industry, outperforming 95.78% of the companies in the same industry.
- FHI has a better Return On Invested Capital (18.60%) than 94.51% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for FHI is significantly above the industry average of 7.27%.
- The last Return On Invested Capital (18.60%) for FHI is above the 3 year average (16.23%), which is a sign of increasing profitability.
| 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
- Looking at the Profit Margin, with a value of 20.80%, FHI is in line with its industry, outperforming 55.70% of the companies in the same industry.
- FHI's Profit Margin has declined in the last couple of years.
- FHI's Operating Margin of 28.35% is in line compared to the rest of the industry. FHI outperforms 56.54% of its industry peers.
- FHI's Operating Margin has been stable in the last couple of years.
- The Gross Margin of FHI (95.56%) is better than 96.20% of its industry peers.
- FHI's Gross Margin has been stable in the last couple of years.
| 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%
2. Health
2.1 Basic Checks
- The number of shares outstanding for FHI has been reduced compared to 1 year ago.
- Compared to 5 years ago, FHI has less shares outstanding
- FHI has a worse debt/assets ratio than last year.
2.2 Solvency
- FHI has an Altman-Z score of 5.29. 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 5.29, FHI belongs to the top of the industry, outperforming 85.65% of the companies in the same industry.
- 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.
- Looking at the Debt to FCF ratio, with a value of 1.34, FHI belongs to the top of the industry, outperforming 88.61% of the companies in the same industry.
- FHI has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
- FHI's Debt to Equity ratio of 0.29 is fine compared to the rest 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 | 5.29 |
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 |
3. Growth
3.1 Past
- FHI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 54.02%, which is quite impressive.
- FHI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.47% yearly.
- FHI shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -12.36%.
- The Revenue has been growing slightly by 4.26% on average over the past years.
EPS 1Y (TTM)54.02%
EPS 3Y3.71%
EPS 5Y3.47%
EPS Q2Q%26.42%
Revenue 1Y (TTM)-12.36%
Revenue growth 3Y7.92%
Revenue growth 5Y4.26%
Sales Q2Q%14.93%
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 15.10% on average per year.
- The Revenue is expected to grow by 4.00% on average over the next years.
EPS Next Y54.58%
EPS Next 2Y26.74%
EPS Next 3Y21.54%
EPS Next 5Y15.1%
Revenue Next Year9.8%
Revenue Next 2Y8.72%
Revenue Next 3Y7.18%
Revenue Next 5Y4%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- FHI is valuated reasonably with a Price/Earnings ratio of 10.92.
- Based on the Price/Earnings ratio, FHI is valued a bit cheaper than 62.87% of the companies in the same industry.
- FHI's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.25.
- FHI is valuated reasonably with a Price/Forward Earnings ratio of 10.21.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of FHI indicates a somewhat cheap valuation: FHI is cheaper than 72.15% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of FHI to the average of the S&P500 Index (25.98), we can say FHI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.92 | ||
| Fwd PE | 10.21 |
4.2 Price Multiples
- 91.98% of the companies in the same industry are more expensive than FHI, based on the Enterprise Value to EBITDA ratio.
- FHI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. FHI is cheaper than 69.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.65 | ||
| EV/EBITDA | 7.14 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The excellent profitability rating of FHI may justify a higher PE ratio.
- A more expensive valuation may be justified as FHI's earnings are expected to grow with 21.54% in the coming years.
PEG (NY)0.2
PEG (5Y)3.15
EPS Next 2Y26.74%
EPS Next 3Y21.54%
5. Dividend
5.1 Amount
- FHI has a Yearly Dividend Yield of 2.49%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 5.87, FHI has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, FHI pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
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.
- The dividend of FHI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP28.5%
EPS Next 2Y26.74%
EPS Next 3Y21.54%
FEDERATED HERMES INC / FHI FAQ
Can you provide the ChartMill fundamental rating for FEDERATED HERMES INC?
ChartMill assigns a fundamental rating of 7 / 10 to FHI.
What is the valuation status for FHI stock?
ChartMill assigns a valuation rating of 8 / 10 to FEDERATED HERMES INC (FHI). This can be considered as Undervalued.
How profitable is FEDERATED HERMES INC (FHI) stock?
FEDERATED HERMES INC (FHI) has a profitability rating of 8 / 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 10.92 and the Price/Book (PB) ratio is 3.42.
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%.