A Comprehensive Look at the Dividend Performance and Sustainability of Federated Hermes Inc
Federated Hermes Inc (FHI, Financial) recently announced a dividend of $0.28 per share, payable on 2023-11-15, with the ex-dividend date set for 2023-11-07. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Federated Hermes Inc's dividend performance and assess its sustainability.
About Federated Hermes Inc
Federated Hermes Inc provides asset management services for institutional and individual investors. The company had $704.0 billion in managed assets at the end of June 2023, composed of equity (12%), multi-asset (1%), fixed-income (12%), alternative (3%), and money market (72%) funds. Federated's cash-management operations are expected to generate around 48% of Federated's revenue this year, compared with 30%, 12%, and 10%, respectively, for the firm's equity, fixed-income, and alternatives/multi-asset operations. The company's products are distributed via trust banks, wealth managers and retail broker/dealers (63% of AUM), institutional investors (27%), and international clients (10%).
Federated Hermes Inc's Dividend History
Federated Hermes Inc has maintained a consistent dividend payment record since 1998. Dividends are currently distributed on a quarterly basis. Federated Hermes Inc has increased its dividend each year since 1998. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 25 years.
Understanding Federated Hermes Inc's Dividend Yield and Growth
As of today, Federated Hermes Inc currently has a 12-month trailing dividend yield of 3.36% and a 12-month forward dividend yield of 3.42%. This suggests an expectation of increased dividend payments over the next 12 months. Over a five-year horizon, this rate increased to 1.30% per year. Over the past decade, Federated Hermes Inc's annual dividends per share growth rate stands at 1.30%.
Is Federated Hermes Inc's Dividend Sustainable?
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Federated Hermes Inc's dividend payout ratio is 0.36.
Federated Hermes Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Federated Hermes Inc's profitability 10 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Federated Hermes Inc's Growth Metrics
Federated Hermes Inc's growth rank of 10 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Federated Hermes Inc's revenue has increased by approximately 7.30% per year on average, a rate that outperforms than approximately 53.19% of global competitors. During the past three years, Federated Hermes Inc's earnings increased by approximately 2.60% per year on average, a rate that outperforms than approximately 43.2% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 2.70% outperforms than approximately 38.48% of global competitors.
Conclusion
In conclusion, Federated Hermes Inc's consistent dividend payments, impressive growth rate, low payout ratio, high profitability, and robust growth metrics indicate a promising future for its dividends. These factors suggest that Federated Hermes Inc is not only capable of maintaining its dividends but also has the potential to increase them in the future. However, as always, investors are encouraged to conduct their research and consider their financial goals before investing.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
