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FHI vs. BSIG: Which Stock Is the Better Value Option?

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Investors with an interest in Financial - Investment Management stocks have likely encountered both Federated Investors (FHI - Free Report) and BrightSphere Investment Group (BSIG - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Investors has a Zacks Rank of #1 (Strong Buy), while BrightSphere Investment Group has a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that FHI likely has seen a stronger improvement to its earnings outlook than BSIG has recently. But this is just one factor that value investors are interested in.

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 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 9.69, while BSIG has a forward P/E of 9.93. We also note that FHI has a PEG ratio of 2.39. 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. BSIG currently has a PEG ratio of 3.22.

Another notable valuation metric for FHI is its P/B ratio of 2.58. 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, BSIG has a P/B of 6.14.

These metrics, and several others, help FHI earn a Value grade of B, while BSIG has been given a Value grade of C.

FHI stands above BSIG 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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BrightSphere Investment Group Inc. (BSIG) - free report >>

Federated Hermes, Inc. (FHI) - free report >>

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