Federated Hermes

FHI

Asset Management · Financial Services

Price

$63.70

+0.57 (+0.90%)

Market Cap

$4.84B

Winston Score

Winston is happy

A high-quality business with solid fundamentals.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Exceptional

Growth

Exceptional

Cash Flow

Strong

Stability

Exceptional

Valuation

Good

Dividends

Strong

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Share count falling — buybacks

−19.8% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 93.6M (2021) → 75.1M (2025)

Winston Score History

The full picture

Federated Hermes is an investment management company that pools money from investors and manages it on their behalf. It runs mutual funds, money market funds, and other investment products used by banks, retirement plans, corporations, and everyday investors. The company is one of the largest managers of money market funds in the United States, which are low-risk accounts businesses and institutions use to park cash.

Federated Hermes earns money by charging fees based on a percentage of the assets it manages — the more money clients invest, the more revenue the company collects. It operates mainly in the United States but also has a meaningful presence in Europe through its Hermes investment arm, which focuses on responsible investing strategies. The company's heavy reliance on money market funds is both a strength and a risk, since those funds tend to attract more cash when interest rates are high but can see outflows when rates fall, making revenue sensitive to Federal Reserve policy decisions.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+17.8% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+25.0% YoY

YoY Growth Rate

Strong earnings growth

R&D Spend

$0/ year

0.0% of revenue

Below sector average (7%)

Research and development spending

Insider Activity

10.4%ownership

↑ Rising

Insiders increasing their stake — aligned with shareholders

Cash Position

Cash flow positive

$481M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Federated Hermes is a rare growth stock that's already generating positive cash flow while growing at 18%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale

Gross Margin

76.1%

Premium pricing power — 76.1% gross margin

Profit after running costs

Operating Margin

26.5%

Excellent — 26.5% operating margin

Return on the money invested

ROCE

25.1%

Exceptional — 25.1% return on capital

ROIC above 25%. Every dollar invested in the business earns more than 25 cents back per year.

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Growth

Sales growth

Sales YoY

+15.3%

Fast-growing sales (+15.3% YoY)

Profit growth

EPS YoY

+22.2%

Earnings growing fast (+22.2% YoY)

Healthy double-digit earnings growth — what compounders look like.

How steady the profit is

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Profit that turns into cash

Cash Conversion

91%

Modest — 91% of profit becomes cash

Spare cash per sale

FCF Margin

18.6%

Converts sales into free cash efficiently (18.6%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

What it owes vs what it owns

Debt / Equity

0.21

Conservative — low debt load (0.21)

Covers its interest

Interest Cover

41.29x

Comfortably covers interest (41.3x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

11.6x

Attractive valuation — P/E 11.6

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

Cheaper or dearer next year

P/E vs Forward

+0.2

GROWING

Earnings roughly flat

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Dividends

Dividend

Dividend Yield

2.25%

Moderate income — 2.25% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend record

Dividend Growth

+10.8%

Dividend growing fast (10.8% YoY)

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