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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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 #5 (Strong Sell). This means that FHI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
FHI currently has a forward P/E ratio of 10.32, while CNS has a forward P/E of 18.81. We also note that FHI has a PEG ratio of 0.51. 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 1.85.
Another notable valuation metric for FHI is its P/B ratio of 3.39. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CNS has a P/B of 5.61.
Based on these metrics and many more, FHI holds a Value grade of A, while CNS has 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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