Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Federated Hermes (FHI) and Cohen & Steers Inc (CNS). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Federated Hermes is sporting a Zacks Rank of #2 (Buy), while Cohen & Steers Inc has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FHI has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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 11.01, while CNS has a forward P/E of 20.34. We also note that FHI has a PEG ratio of 0.54. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CNS currently has a PEG ratio of 2.00.
Another notable valuation metric for FHI is its P/B ratio of 3.62. 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 6.06.
Based on these metrics and many more, FHI holds a Value grade of B, while CNS has a Value grade of F.
FHI has seen stronger estimate revision activity and sports more attractive valuation metrics than CNS, so it seems like value investors will conclude that FHI is the superior 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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