Federated Hermes, Inc.
Federated Hermes, Inc. Fundamental Analysis
Federated Hermes, Inc. (FHI) shows strong financial fundamentals with a PE ratio of 10.51, profit margin of 22.39%, and ROE of 35.33%. The company generates $1.9B in annual revenue with weak year-over-year growth of 1.40%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 68.5/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze FHI's fundamental strength across five key dimensions:
Efficiency Score
ExcellentFHI demonstrates superior asset utilization.
Valuation Score
ExcellentFHI trades at attractive valuation levels.
Growth Score
WeakFHI faces weak or negative growth trends.
Financial Health Score
ExcellentFHI maintains a strong and stable balance sheet.
Profitability Score
ExcellentFHI achieves industry-leading margins.
Key Financial Metrics
Is FHI Expensive or Cheap?
P/E Ratio
FHI trades at 10.51 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, FHI's PEG of 1.23 indicates fair valuation.
Price to Book
The market values Federated Hermes, Inc. at 3.55 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 7.81 times EBITDA. This is generally considered low.
How Well Does FHI Make Money?
Net Profit Margin
For every $100 in sales, Federated Hermes, Inc. keeps $22.39 as profit after all expenses.
Operating Margin
Core operations generate 28.54 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $35.33 in profit for every $100 of shareholder equity.
ROA
Federated Hermes, Inc. generates $17.64 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Federated Hermes, Inc. produces operating cash flow of $306.09M, showing steady but balanced cash generation.
Free Cash Flow
Federated Hermes, Inc. generates strong free cash flow of $300.00M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.95 in free cash annually.
FCF Yield
FHI converts 6.65% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
10.51
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.23
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.55
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.42
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.38
vs 25 benchmark
Current Ratio
Current assets to current liabilities
41.26
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.35
vs 25 benchmark
ROA
Return on assets percentage
0.18
vs 25 benchmark
ROCE
Return on capital employed
0.23
vs 25 benchmark
How FHI Stacks Against Its Sector Peers
| Metric | FHI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 10.51 | 18.59 | Better (Cheaper) |
| ROE | 35.33% | 801.00% | Weak |
| Net Margin | 22.39% | -498.00% (disorted) | Strong |
| Debt/Equity | 0.38 | 0.98 | Strong (Low Leverage) |
| Current Ratio | 41.26 | 661.40 | Strong Liquidity |
| ROA | 17.64% | -21324.00% (disorted) | Strong |
FHI outperforms its industry in 5 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Federated Hermes, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
50.62%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
20.64%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
26.70%
Industry Style: Value, Dividend, Cyclical
High Growth