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FHI vs. BLK: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Federated Hermes (FHI - Free Report) and BlackRock Finance (BLK - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Federated Hermes is sporting a Zacks Rank of #1 (Strong Buy), while BlackRock Finance has a Zacks Rank of #2 (Buy). 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. However, value investors will care about much more than just this.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
FHI currently has a forward P/E ratio of 13.50, while BLK has a forward P/E of 24. We also note that FHI has a PEG ratio of 1.46. 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. BLK currently has a PEG ratio of 1.85.
Another notable valuation metric for FHI is its P/B ratio of 3.21. 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, BLK has a P/B of 3.82.
These metrics, and several others, help FHI earn a Value grade of B, while BLK has been given a Value grade of D.
FHI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FHI is likely the superior value option right now.
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FHI vs. BLK: Which Stock Is the Better Value Option?
Investors interested in stocks from the Financial - Investment Management sector have probably already heard of Federated Hermes (FHI - Free Report) and BlackRock Finance (BLK - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Federated Hermes is sporting a Zacks Rank of #1 (Strong Buy), while BlackRock Finance has a Zacks Rank of #2 (Buy). 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. However, value investors will care about much more than just this.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
FHI currently has a forward P/E ratio of 13.50, while BLK has a forward P/E of 24. We also note that FHI has a PEG ratio of 1.46. 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. BLK currently has a PEG ratio of 1.85.
Another notable valuation metric for FHI is its P/B ratio of 3.21. 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, BLK has a P/B of 3.82.
These metrics, and several others, help FHI earn a Value grade of B, while BLK has been given a Value grade of D.
FHI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FHI is likely the superior value option right now.