Federated Hermes, Inc. (FHI) stock analysis

P/E below its 5-year median

Federated Hermes's P/E of 11.7 is below its own 5-year median of 11.7.

P/E below the industry

Federated Hermes's P/E of 11.7 is below the Services Allied with the Exchange of Securities median of 21.0.

EV/EBITDA above its 5-year median

Federated Hermes's EV/EBITDA of 8.0 is above its 5-year median of 7.5.

P/B below the industry

Federated Hermes's price-to-book of 3.70 is below the Services Allied with the Exchange of Securities median of 3.70.

Trading below fair value

The share price of $64.67 is below our fair value estimate of $78.93.

Margin of safety under 20%

The price is 18.1% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 7.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 24.6% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 10.1% over the last twelve months, against a 5-year average of 4.3% a year.

Growing faster than the industry

Revenue grew 13.2% over the last twelve months; the Services Allied with the Exchange of Securities median is 8.7%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 33.9% over the last twelve months and averaged 26.6% over five years.

Return on capital over 10%

Return on invested capital was 51.0%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Federated Hermes's return on equity of 33.9% is above the Services Allied with the Exchange of Securities median of 15.7%.

Earnings grew over 5 years

Net income grew 4.3% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 21.3% over the last twelve months, against a 5-year average of 19.0%.

Net margin above the industry

Federated Hermes's net margin of 21.3% is above the Services Allied with the Exchange of Securities median of 16.3%.

No debt

Federated Hermes has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 2.48 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.60; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Federated Hermes paid dividends worth 1.7% of the share price over the last twelve months.

Yield below Treasuries

The 1.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Federated Hermes yields 1.7%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 26.1% of net income.

Covered by free cash flow

Dividends take 28.4% of free cash flow.