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FHI vs. APO: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Financial - Investment Management stocks have likely encountered both Federated Hermes (FHI - Free Report) and Apollo Global Management, LLC (APO - 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.

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.

Federated Hermes and Apollo Global Management, LLC are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that FHI likely has seen a stronger improvement to its earnings outlook than APO has recently. 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

FHI currently has a forward P/E ratio of 7.45, while APO has a forward P/E of 24.17. We also note that FHI has a PEG ratio of 0.75. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. APO currently has a PEG ratio of 1.42.

Another notable valuation metric for FHI is its P/B ratio of 1.92. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, APO has a P/B of 2.78.

Based on these metrics and many more, FHI holds a Value grade of A, while APO has a Value grade of C.

FHI stands above APO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FHI is the superior value option right now.


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Apollo Global Management Inc. (APO) - free report >>

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