Which Stock is the Better Value: FHI or BLK? A Comprehensive Analysis of Federated Hermes and BlackRock
Investors seeking outperforming stocks in the Financial - Investment Management sector often consider Federated Hermes (FHI) and BlackRock (BLK). But which of these two stocks offers better value for investors right now? Let's take a closer look. Each investor has their own approach to finding great value opportunities, but our model combines 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 grade companies based on specific traits. Federated Hermes and BlackRock currently have Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively. This indicates that FHI's earnings estimate revision activity has been more impressive, giving investors confidence in its improving analyst outlook. However, this is just one factor that value investors consider. Value investors also focus on tried-and-true valuation metrics to determine if a company is undervalued at its current share price. The Style Score Value grade considers various key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and other stats commonly used by value investors. FHI currently has a forward P/E ratio of 9.93, while BLK has a forward P/E of 21.95. Additionally, FHI has a PEG ratio of 0.78, which is similar to the widely-known P/E ratio but also takes into account the company's expected earnings growth rate. In contrast, BLK has a PEG ratio of 2.99. Another notable valuation metric for FHI is its P/B ratio of 3.16, which compares a stock's market value with its book value (total assets minus total liabilities). For comparison, BLK has a P/B of 3.17. These metrics contribute to FHI's Value grade of B and BLK's Value grade of F. FHI stands above BLK due to its solid earnings outlook and superior valuation figures. In conclusion, based on these factors, FHI appears to be the better value option at this time. For the latest recommendations from Zacks Investment Research, download our free report on the 7 Best Stocks for the Next 30 Days by clicking the link below:
Federated Hermes, Inc. (FHI) : Free Stock Analysis Report BlackRock (BLK) : Free Stock Analysis Report
This article was originally published on Zacks Investment Research (zacks.com).
