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Mast Global Battery Recycling & Production ETF (EV) - free report >>
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FHI or EV: Which Is the Better Value Stock Right Now?
Investors with an interest in Financial - Investment Management stocks have likely encountered both Federated Hermes (FHI - Free Report) and Eaton Vance (EV - Free Report) . 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Both Federated Hermes and Eaton Vance have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
FHI currently has a forward P/E ratio of 9.62, while EV has a forward P/E of 18.24. We also note that FHI has a PEG ratio of 0.78. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. EV currently has a PEG ratio of 1.34.
Another notable valuation metric for FHI is its P/B ratio of 2.53. 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, EV has a P/B of 5.66.
Based on these metrics and many more, FHI holds a Value grade of A, while EV has a Value grade of D.
Both FHI and EV are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FHI is the superior value option right now.