FHI or SEIC: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Financial - Investment Management sector might want to consider either Federated Hermes (FHI) or SEI Investments (SEIC). 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 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.
Currently, both Federated Hermes and SEI Investments are holding a Zacks Rank of # 1 (Strong Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
FHI currently has a forward P/E ratio of 9.76, while SEIC has a forward P/E of 17.21. We also note that FHI has a PEG ratio of 0.80. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SEIC currently has a PEG ratio of 1.43.
Another notable valuation metric for FHI is its P/B ratio of 2.67. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SEIC has a P/B of 4.25.
These metrics, and several others, help FHI earn a Value grade of B, while SEIC has been given a Value grade of F.
Both FHI and SEIC 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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Federated Hermes, Inc. (FHI) : Free Stock Analysis Report
SEI Investments Company (SEIC) : Free Stock Analysis Report
