Download PDF

1. Company Snapshot

1.a. Company Description

Federated Hermes, Inc.is a publicly owned asset management holding company.Through its subsidiaries, the firm provides its services to individuals, including high net worth individuals, banking or thrift institutions, investment companies, pension and profit sharing plans, pooled investment vehicles, charitable organizations, state or municipal government entities, and registered investment advisors.


Through its subsidiaries, it manages separate client-focused equity, fixed income, balanced and money market mutual funds along with separate client-focused equity, fixed income, money market, and balanced portfolios.Through its subsidiaries, the firm invests in the public equity and fixed income markets across the globe.It invests in growth and value stocks of small-cap, mid-cap, and large-cap companies.


The firm makes its fixed income investments in ultra-short, short-term, and intermediate-term mortgage-backed, U.S. Government, U.S. corporate, high yield, and municipal securities.It employs both fundamental and quantitative analysis to make its equity investments.Federated Hermes, Inc.


was founded in 1955 and is based in Pittsburgh, Pennsylvania with additional offices in New York City and London, United Kingdom.

Show Full description

1.b. Last Insights on FHI

Federated Hermes' recent performance was driven by strong Q2 2025 earnings, with a 480% year-over-year increase in earnings per share. The company's total assets under management reached a record $845.7 billion, with its MDT strategies growing to $23.2 billion, up $6.4 billion from Q1 2025. Federated Hermes also declared a $0.34 per share dividend and authorized a new share repurchase program. The company's Q2 2025 earnings per diluted share of $1.16 beat the Zacks Consensus Estimate of $1.02 per share, with net income of $91.0 million for Q2 2025, compared to $21.0 million for Q2 2024.

1.c. Company Highlights

2. Federated Hermes' Q3 2025 Earnings: A Strong Performance

Federated Hermes reported a robust financial performance in Q3 2025, with revenue increasing by $44.6 million or 10% to an undisclosed figure, driven by higher money market assets and equity assets. The company's EPS came in at $1.34, beating estimates of $1.11. The strong revenue growth was partially offset by a 10% increase in operating expenses, mainly due to higher distribution expense and transaction costs from the FCP acquisition. As Tom Donahue stated, "the expense base is expected to increase in line with revenue growth," indicating a continued investment in the business.

Publication Date: Nov -04

📋 Highlights
  • Record AUM:: Assets under management reached $871 billion, driven by gains in money market and equity strategies.
  • Equity Growth:: Equity assets rose $5.7 billion (+6% QoQ) due to market gains, though net sales were -$130 million.
  • MDT Performance:: 7 of 8 MDT fundamental quant strategies ranked top quartile in Morningstar categories for 1-3 year periods.
  • Alternative Assets Shift:: Private markets assets fell $1.7 billion (real estate fund transaction), but MDT market-neutral strategy saw $173 million net sales.
  • Money Market Expansion:: Money market assets hit $653 billion (+$24.7B QoQ) with tokenized UCITS funds launched via Archax.

Asset Under Management Growth

The company's assets under management (AUM) reached a record high of $871 billion, driven by gains from money market and equity strategies. Equity assets increased by $5.7 billion or 6% from the prior quarter due to market gains, while money market assets reached a record high of $653 billion. The alternative private markets category saw a decrease in assets, mainly due to a $1.1 billion real estate fund transaction. However, the MDT market-neutral alternative strategy had net sales of $173 million in Q3.

Business Outlook

The company's MDT franchise continues to show growing momentum, with net sales of $660 million through October 24, according to Chris Donahue. The institutional pipeline is strong, with over $2 billion in it, and Federated Hermes is seeing opportunities in various countries and styles. The company expects to fund about 2/3 of the pipeline in the fourth quarter, with the remaining half funding continuing through 2026.

Valuation and Growth Prospects

With a P/E Ratio of 9.73 and an ROE of 34.07%, Federated Hermes appears to be reasonably valued. The company's dividend yield of 2.65% is also attractive. Analysts estimate next year's revenue growth at 7.2%, indicating a continued strong performance. The P/B Ratio of 3.12 and the P/S Ratio of 2.18 suggest that the company's valuation is in line with its growth prospects. Overall, Federated Hermes' strong financial performance, growing momentum in its MDT franchise, and reasonable valuation make it an attractive investment opportunity.

3. NewsRoom

Card image cap

New Strong Buy Stocks for December 4th

Dec -04

Source: zacks.com

Card image cap

Best Value Stocks to Buy for Dec. 4

Dec -04

Source: zacks.com

Card image cap

Capital Fund Management S.A. Has $1.79 Million Holdings in Federated Hermes, Inc. $FHI

Dec -04

Source: defenseworld.net

Card image cap

Federated Hermes, Inc. announces changes to Investment and Distribution executive leadership and Board of Directors

Dec -02

Source: prnewswire.com

Card image cap

Schneider Downs Bets Heavily on Federated Hermes (FHI) With a Purchase of 2.6 Million Shares

Nov -28

Source: fool.com

Card image cap

Month-end portfolio data now available for Federated Hermes Premier Municipal Income Fund

Nov -17

Source: prnewswire.com

Card image cap

Connor Clark & Lunn Investment Management Ltd. Takes $1.76 Million Position in Federated Hermes, Inc. $FHI

Nov -17

Source: defenseworld.net

Card image cap

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

Nov -12

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.38%)

6. Segments

Federated Hermes Funds

Expected Growth: 3.5%

Federated Hermes Funds' 3.5% growth is driven by increasing demand for ESG investments, strong brand recognition, and a diversified product suite. The fund's active management approach, combined with its expertise in sustainable investing, has attracted environmentally conscious investors. Additionally, the fund's global reach and strategic partnerships have expanded its distribution channels, contributing to its growth.

Separate Accounts

Expected Growth: 2.8%

Strong investment performance, increasing demand for ESG-focused strategies, and expanding distribution channels drive Separate Accounts' 2.8% growth. Federated Hermes' expertise in active management and stewardship, combined with its strong brand reputation, contribute to the segment's growth. Additionally, the increasing adoption of sustainable investing and the need for customized investment solutions also support the segment's expansion.

Other

Expected Growth: 2.2%

Federated Hermes, Inc.'s 2.2% growth in 'Other' segment is driven by increasing demand for alternative investment strategies, expansion of its stewardship and ESG capabilities, and growing adoption of its responsible investment solutions among institutional clients.

7. Detailed Products

Equity Strategies

Federated Hermes offers a range of equity strategies that aim to deliver long-term growth and income to investors. These strategies are designed to meet the diverse needs of investors, from core equity to specialty and thematic approaches.

Fixed Income Strategies

Federated Hermes provides a range of fixed income strategies that aim to deliver income and capital preservation to investors. These strategies include government and corporate bonds, high-yield bonds, and emerging market debt.

Multi-Asset Strategies

Federated Hermes offers multi-asset strategies that combine different asset classes to provide a balanced portfolio. These strategies aim to deliver long-term growth and income while managing risk.

Sustainable and Responsible Investing (SRI)

Federated Hermes offers a range of SRI strategies that aim to deliver long-term growth and income while incorporating environmental, social, and governance (ESG) considerations.

Stewardship Services

Federated Hermes provides stewardship services that aim to promote good governance and sustainable business practices in the companies in which they invest.

ESG Engagement

Federated Hermes offers ESG engagement services that aim to promote sustainable business practices and good governance in the companies in which they invest.

Active Equity ESG

Federated Hermes offers active equity ESG strategies that aim to deliver long-term growth and income while incorporating ESG considerations.

Fixed Income ESG

Federated Hermes offers fixed income ESG strategies that aim to deliver income and capital preservation while incorporating ESG considerations.

8. Federated Hermes, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Federated Hermes, Inc. is medium due to the presence of alternative investment products and services offered by competitors.

Bargaining Power Of Customers

The bargaining power of customers for Federated Hermes, Inc. is low due to the company's strong brand reputation and diversified client base.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Federated Hermes, Inc. is medium due to the company's dependence on a few key suppliers for certain services and technology.

Threat Of New Entrants

The threat of new entrants for Federated Hermes, Inc. is high due to the increasing trend of fintech companies and digital investment platforms entering the market.

Intensity Of Rivalry

The intensity of rivalry for Federated Hermes, Inc. is high due to the highly competitive nature of the investment management industry and the presence of established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 24.40%
Debt Cost 3.95%
Equity Weight 75.60%
Equity Cost 9.49%
WACC 8.14%
Leverage 32.27%

11. Quality Control: Federated Hermes, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Federated Hermes

A-Score: 7.7/10

Value: 5.9

Growth: 6.6

Quality: 8.0

Yield: 7.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
State Street

A-Score: 6.5/10

Value: 6.6

Growth: 4.7

Quality: 5.6

Yield: 6.0

Momentum: 7.5

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Victory Capital Holdings

A-Score: 6.4/10

Value: 4.7

Growth: 6.7

Quality: 8.4

Yield: 6.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
FS KKR Capital

A-Score: 6.4/10

Value: 6.0

Growth: 4.4

Quality: 7.2

Yield: 10.0

Momentum: 1.5

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Prospect Capital

A-Score: 5.9/10

Value: 6.3

Growth: 3.9

Quality: 6.9

Yield: 10.0

Momentum: 0.0

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Cohen & Steers

A-Score: 5.3/10

Value: 3.8

Growth: 3.3

Quality: 8.8

Yield: 7.0

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

50.85$

Current Price

50.85$

Potential

-0.00%

Expected Cash-Flows