Investors looking for stocks in the Financial - Investment Management sector might want to consider either Federated Hermes (FHI) or Cohen & Steers Inc (CNS). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Federated Hermes is sporting a Zacks Rank of #2 (Buy), while Cohen & Steers Inc has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FHI is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
FHI currently has a forward P/E ratio of 11.73, while CNS has a forward P/E of 22.82. We also note that FHI has a PEG ratio of 0.69. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CNS currently has a PEG ratio of 2.35.
Another notable valuation metric for FHI is its P/B ratio of 3.67. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CNS has a P/B of 6.54.
These metrics, and several others, help FHI earn a Value grade of B, while CNS has been given a Value grade of F.
FHI sticks out from CNS in both our Zacks Rank and Style Scores models, so value investors will likely feel that FHI is the better option right now.
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Federated Hermes, Inc. (FHI): Free Stock Analysis Report Cohen & Steers Inc (CNS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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