Affiliated Managers Group (NYSE:AMG) and Federated Hermes (NYSE:FHI) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.
Valuation and Earnings
This table compares Affiliated Managers Group and Federated Hermes' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Affiliated Managers Group | $2.24 billion | 2.95 | $15.70 million | $14.22 | 10.89 |
Federated Hermes | $1.33 billion | 2.23 | $272.34 million | $2.69 | 11.10 |
Federated Hermes has lower revenue, but higher earnings than Affiliated Managers Group. Affiliated Managers Group is trading at a lower price-to-earnings ratio than Federated Hermes, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Affiliated Managers Group and Federated Hermes' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Affiliated Managers Group | 5.37% | 19.15% | 8.64% |
Federated Hermes | 21.72% | 28.99% | 16.18% |
Dividends
Affiliated Managers Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Federated Hermes pays an annual dividend of $1.08 per share and has a dividend yield of 3.6%. Affiliated Managers Group pays out 0.3% of its earnings in the form of a dividend. Federated Hermes pays out 40.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Affiliated Managers Group has increased its dividend for 1 consecutive years.
Volatility and Risk
Affiliated Managers Group has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Federated Hermes has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.
Insider & Institutional Ownership
98.8% of Affiliated Managers Group shares are held by institutional investors. Comparatively, 79.1% of Federated Hermes shares are held by institutional investors. 1.7% of Affiliated Managers Group shares are held by insiders. Comparatively, 5.2% of Federated Hermes shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of current ratings for Affiliated Managers Group and Federated Hermes, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Affiliated Managers Group | 1 | 2 | 2 | 0 | 2.20 |
Federated Hermes | 1 | 3 | 1 | 0 | 2.00 |
Affiliated Managers Group currently has a consensus price target of $133.60, indicating a potential downside of 13.72%. Federated Hermes has a consensus price target of $28.00, indicating a potential downside of 6.26%. Given Federated Hermes' higher probable upside, analysts plainly believe Federated Hermes is more favorable than Affiliated Managers Group.
Summary
Affiliated Managers Group beats Federated Hermes on 10 of the 17 factors compared between the two stocks.