Comparing Federated Hermes and CI Financial: A Financial Analysis

Federated Hermes (NYSE:FHI) and CI Financial (NYSE:CIXXF) are two mid-cap finance companies that provide investment management services. In this article, we will explore which company is more favorable by comparing their financial metrics, including valuation, institutional ownership, dividends, risk, earnings, analyst recommendations, and profitability.

Earnings & Valuation

The earnings and valuation of both companies reveal interesting insights. Below is a comparison of their gross revenue, net income, and earnings per share.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federated Hermes	$1.60 billion	1.95	$298.98 million	$3.11	12.26
CI Financial	$2.03 billion	1.53	$3.72 million	($0.33)	-65.57

Federated Hermes has higher earnings but lower revenue compared to CI Financial. Despite having higher earnings, CI Financial offers a lower price-to-earnings ratio, indicating it might be the more affordable option at present.

Insider & Institutional Ownership

Institutional investors own a significant portion of Federated Hermes, holding 75.9% of its shares, while insiders own 3.7%. This strong institutional ownership suggests confidence among major investors in Federated Hermes’ long-term performance.

Analyst Ratings

Recent ratings for both Federated Hermes and CI Financial show varying levels of analyst confidence:

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federated Hermes	0	4	2	0	2.33
CI Financial	1	1	0	0	1.50

Federated Hermes has a stronger consensus from analysts, with a target price of $42.17, suggesting a potential upside of 10.56%, indicating a favorable outlook compared to CI Financial.

Profitability

An examination of the profitability metrics reveals the following insights:

	Net Margins	Return on Equity	Return on Assets
Federated Hermes	16.62%	29.85%	16.05%
CI Financial	-2.28%	57.73%	5.23%

Federated Hermes shows strong profitability with a positive net margin, while CI Financial's negative net margin reflects difficulties in their earnings performance.

Dividends

When it comes to dividends, Federated Hermes offers an annual dividend of $1.24 per share with a dividend yield of 3.3%. On the other hand, CI Financial pays an annual dividend of $0.55 per share and has a yield of 2.5%.

Federated Hermes has a payout ratio of 39.9%, which is sustainable, while CI Financial has a negative payout ratio of -166.7%, indicating challenges in funding its dividend through earnings.

Risk and Volatility

In terms of risk, Federated Hermes demonstrates a beta of 1.16, which indicates its stock is 16% more volatile than the S&P 500. In contrast, CI Financial has a beta of 1.42, suggesting it is 42% more volatile, indicating a higher risk profile.

Summary

Overall, Federated Hermes outperforms CI Financial in 12 out of 16 comparison factors, showcasing its stronger financial position and outlook.

About Federated Hermes

Federated Hermes, Inc. is a leading investment management firm that offers services to various clients, including individuals, institutions, and charitable organizations. Founded in 1955 and headquartered in Pittsburgh, Pennsylvania, it provides a wide range of investment strategies utilizing both fundamental and quantitative analysis.

About CI Financial

CI Financial Corp. is an asset management holding company, established in 1965 and based in Toronto, Canada. It manages diverse investment portfolios, mutual funds, and hedge funds through its subsidiaries.

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