Back to top
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Mast Global Battery Recycling & Production ETF (EV) - free report >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Mast Global Battery Recycling & Production ETF (EV) - free report >>
Image: Bigstock
FHI vs. EV: Which Stock Is the Better Value Option?
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 presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on 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. But this is just one piece of the puzzle for value investors.
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 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 9.45, while EV has a forward P/E of 18.27. We also note that FHI has a PEG ratio of 0.76. 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. EV currently has a PEG ratio of 1.34.
Another notable valuation metric for FHI is its P/B ratio of 2.48. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, EV has a P/B of 5.76.
Based on these metrics and many more, FHI holds a Value grade of B, 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.