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FHI or CNS: Which Is the Better Value Stock Right Now?

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Investors interested in Financial - Investment Management stocks are likely familiar with Federated Hermes (FHI - Free Report) and Cohen & Steers Inc (CNS - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Hermes and Cohen & Steers Inc are both sporting a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

FHI currently has a forward P/E ratio of 10.34, while CNS has a forward P/E of 21.32. We also note that FHI has a PEG ratio of 1.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CNS currently has a PEG ratio of 1.83.

Another notable valuation metric for FHI is its P/B ratio of 3.42. 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, CNS has a P/B of 5.91.

These are just a few of the metrics contributing to FHI's Value grade of B and CNS's Value grade of F.

Both FHI and CNS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FHI is the superior value option right now.

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