We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Is Federated Hermes Poised to Sustain Its Capital Return Strategy?
Read MoreHide Full Article
Key Takeaways
FHI raised its quarterly dividend 11.8% and maintains a 28% payout ratio.
Federated Hermes had nearly 2.3 million shares available for repurchase as of June 30, 2026.
FHI's acquisitions are expanding its asset management platform and assets under management.
Federated Hermes, Inc. (FHI - Free Report) maintains a disciplined capital allocation strategy focused on returning value to shareholders through dividends and share repurchases.
The company has a strong dividend track record, having paid regular dividends since its initial public offering in 1998. In April 2026, FHI raised its quarterly dividend by 11.8% to 38 cents per share, further strengthening its shareholder return profile.
Over the past five years, FHI has increased its dividend five times, delivering an annualized growth rate of 9%. Its payout ratio stands at 28%, while the stock currently offers a 2.3% dividend yield. The moderate payout ratio provides the company with flexibility to retain earnings for business investments while continuing to reward shareholders.
Dividend Yield
Image Source: Zacks Investment Research
Beyond dividends, Federated Hermes actively returns capital through share repurchases. In July 2025, its board authorized the company’s 18th repurchase program, allowing it to buy back up to an additional 5 million shares with no expiration date. With three active programs, its total repurchase authorization reached 15 million shares. As of June 30, 2026, nearly 2.3 million shares remained available for repurchase, providing additional capacity for capital deployment.
Meanwhile, FHI continues to pursue strategic acquisitions to strengthen its asset management platform and expand assets under management. In April 2026, the company acquired an 80% stake in FCP Fund Manager, adding approximately $3.2 billion in U.S. multifamily real estate managed assets. Earlier acquisitions, including Rivington Energy Management and C.W. Henderson, further expanded its infrastructure and separately managed accounts capabilities. These investments are positioning FHI to support both growth initiatives and shareholder returns.
The company also maintains a solid liquidity profile. As of June 30, 2026, it had $480.7 million in cash and other investments compared with $348.5 million in long-term debt. It also had access to a $350 million unsecured revolving credit facility, with no outstanding borrowings. The healthy liquidity position provides financial flexibility to meet its obligations, pursue growth opportunities and navigate challenging economic conditions.
With consistent dividend growth, additional share repurchase capacity, strategic acquisitions and a solid liquidity profile, FHI is well-positioned to balance shareholder returns with investments that can drive sustainable long-term growth.
Where Do FHI’s Peers Stand in Terms of Capital Returns?
Similar to Federated Hermes, its peers T. Rowe Price Group, Inc. (TROW - Free Report) and Franklin Resources, Inc. (BEN - Free Report) have also strengthened shareholder returns through dividend increases and buybacks.
T. Rowe Price raised its quarterly dividend by 2.4% to $1.30 per share in February 2026, marking another annual increase since its IPO in 1986. In March 2020, T. Rowe Price approved a repurchase plan for 24.1 million shares, which was increased by nearly 15 million shares in 2020 to 39.1 million shares. As of June 30, 2026, 6.9 million shares remained available under the authorization.
Meanwhile, Franklin Resources announced a 3.1% increase in its common stock dividend in December 2025. Franklin Resources also authorized an additional 20.8 million shares for repurchase, bringing the total authorization to 40 million shares, with $35.6 million worth of shares remaining available as of June 30, 2026.
FHI’s Price Performance and Zack Rank
Shares of the company have gained 16.7% in the past six months compared with the industry’s growth of 12.7%.
View the Zacks #1 Rank List
Image: Bigstock
Is Federated Hermes Poised to Sustain Its Capital Return Strategy?
Key Takeaways
Federated Hermes, Inc. (FHI - Free Report) maintains a disciplined capital allocation strategy focused on returning value to shareholders through dividends and share repurchases.
The company has a strong dividend track record, having paid regular dividends since its initial public offering in 1998. In April 2026, FHI raised its quarterly dividend by 11.8% to 38 cents per share, further strengthening its shareholder return profile.
Over the past five years, FHI has increased its dividend five times, delivering an annualized growth rate of 9%. Its payout ratio stands at 28%, while the stock currently offers a 2.3% dividend yield. The moderate payout ratio provides the company with flexibility to retain earnings for business investments while continuing to reward shareholders.
Dividend Yield
Image Source: Zacks Investment Research
Beyond dividends, Federated Hermes actively returns capital through share repurchases. In July 2025, its board authorized the company’s 18th repurchase program, allowing it to buy back up to an additional 5 million shares with no expiration date. With three active programs, its total repurchase authorization reached 15 million shares. As of June 30, 2026, nearly 2.3 million shares remained available for repurchase, providing additional capacity for capital deployment.
Meanwhile, FHI continues to pursue strategic acquisitions to strengthen its asset management platform and expand assets under management. In April 2026, the company acquired an 80% stake in FCP Fund Manager, adding approximately $3.2 billion in U.S. multifamily real estate managed assets. Earlier acquisitions, including Rivington Energy Management and C.W. Henderson, further expanded its infrastructure and separately managed accounts capabilities. These investments are positioning FHI to support both growth initiatives and shareholder returns.
The company also maintains a solid liquidity profile. As of June 30, 2026, it had $480.7 million in cash and other investments compared with $348.5 million in long-term debt. It also had access to a $350 million unsecured revolving credit facility, with no outstanding borrowings. The healthy liquidity position provides financial flexibility to meet its obligations, pursue growth opportunities and navigate challenging economic conditions.
With consistent dividend growth, additional share repurchase capacity, strategic acquisitions and a solid liquidity profile, FHI is well-positioned to balance shareholder returns with investments that can drive sustainable long-term growth.
Where Do FHI’s Peers Stand in Terms of Capital Returns?
Similar to Federated Hermes, its peers T. Rowe Price Group, Inc. (TROW - Free Report) and Franklin Resources, Inc. (BEN - Free Report) have also strengthened shareholder returns through dividend increases and buybacks.
T. Rowe Price raised its quarterly dividend by 2.4% to $1.30 per share in February 2026, marking another annual increase since its IPO in 1986. In March 2020, T. Rowe Price approved a repurchase plan for 24.1 million shares, which was increased by nearly 15 million shares in 2020 to 39.1 million shares. As of June 30, 2026, 6.9 million shares remained available under the authorization.
Meanwhile, Franklin Resources announced a 3.1% increase in its common stock dividend in December 2025. Franklin Resources also authorized an additional 20.8 million shares for repurchase, bringing the total authorization to 40 million shares, with $35.6 million worth of shares remaining available as of June 30, 2026.
FHI’s Price Performance and Zack Rank
Shares of the company have gained 16.7% in the past six months compared with the industry’s growth of 12.7%.
Price Performance
Image Source: Zacks Investment Research
Federated Hermes currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.