Federated Hermes (formerly Federated Investors) provides its services to individuals, including high net worth individuals, banking or thrift institutions, investment companies, pension and profit sharing plans, pooled investment vehicles, charitable organizations, state or municipal government entities, and registered investment advisors. Through its subsidiaries, it manages separate client-focused equity, fixed income, and money market mutual funds and separate client-focused equity, fixed income, and balanced portfolios. The company was founded in 1955 and is based in Pittsburgh, Pennsylvania.
FHI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Federated Hermes Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Federated Hermes Inc ranked in the 63th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 63.17%. As for the metrics that stood out in our discounted cash flow analysis of Federated Hermes Inc, consider:
The company's debt burden, as measured by earnings divided by interest payments, is 129.74; that's higher than 95.74% of US stocks in the Financial Services sector that have positive free cash flow.
The business' balance sheet reveals debt to be 7% of the company's capital (with equity being the remaining amount). Approximately just 20.62% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
FHI's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than 40.33% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
WLTW, TW, GL, THG, and OCN can be thought of as valuation peers to FHI, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
Pandemic increases impact of social factors on companies’ stock performance Submitted By Madeleine Taylor | 14/01/2021 - 5:35pm The ‘social premium’ for investing in companies with good or improving social practices is rising, according to new research from US-based asset manager Federated Hermes. In 2020, social factors were found to add up to 17 basis points each month to returns, which is two basis points higher than the result of a previous study in 2018. Lewis Grant, senior global equities portfolio manager at Federated Hermes, says that this increase reflects the fact that 2020 was a “huge turning point in society that brought some really difficult and ingrained issues to the fore”. The impact of the coronavirus pandemic and the growth of the Black Lives Matter movement after the ...