Earnings and Dividend Growth Could Be a Game Changer for Federated Hermes (FHI)

• Federated Hermes' board declared a US$0.34 per share dividend, payable November 14, 2025, to shareholders of record as of November 7, following the release of third-quarter earnings showing increases in both revenue and net income compared to the prior year.
• These results highlight continued financial strength, with basic earnings per share from continuing operations rising to US$1.34 from US$1.06 year-over-year, and cumulative nine-month net income nearing US$300 million.
• We'll explore how this strong earnings growth may impact Federated Hermes' investment narrative and outlook on future profitability.

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Federated Hermes Investment Narrative Recap

To be a shareholder in Federated Hermes, you need confidence in the enduring demand for active asset management, money market funds, and income strategies, while accepting that fee compression and competition remain the key risks. The latest dividend declaration and robust third-quarter earnings improve short-term sentiment, but do not materially change the primary catalyst, which is ongoing growth in money market fund assets, or the biggest challenge, which remains pressure on fees and margins.

The third-quarter earnings announcement stands out, with revenue rising to US$469.45 million and net income reaching US$104.13 million versus a year ago. This improvement aligns directly with recent catalysts, especially strong money market fund inflows supporting both earnings per share and dividend growth potential in the near term.

By contrast, investors should remain aware of ongoing fee pressure and increased competition, especially as...

Read the full narrative on Federated Hermes (it's free!)

Federated Hermes' narrative projects $1.9 billion revenue and $379.7 million earnings by 2028. This requires 3.3% yearly revenue growth and a $29.8 million earnings increase from the current $349.9 million.

Uncover how Federated Hermes' forecasts yield a $52.29 fair value, a 6% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 4 members of the Simply Wall St Community range from US$52.29 to US$58.69. Some view money market fund growth as a key driver, but fee competition continues to shape outlooks, explore how different investors are weighing these factors.

Explore 4 other fair value estimates on Federated Hermes - why the stock might be worth as much as 19% more than the current price!

Build Your Own Federated Hermes Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Federated Hermes research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Federated Hermes research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Federated Hermes' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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