Head-To-Head Comparison: StepStone Group (NASDAQ:STEP) vs. Federated Hermes (NYSE:FHI)

Federated Hermes (NYSE:FHI) and StepStone Group (NASDAQ:STEP) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.

Insider & Institutional Ownership

79.1% of Federated Hermes shares are held by institutional investors. 5.2% of Federated Hermes shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Federated Hermes and StepStone Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federated Hermes 21.72% 28.99% 16.18%
StepStone Group N/A N/A N/A

Analyst Ratings

This is a breakdown of current ratings and price targets for Federated Hermes and StepStone Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federated Hermes 0 4 1 0 2.20
StepStone Group 0 3 2 0 2.40

Federated Hermes presently has a consensus target price of $28.00, indicating a potential upside of 5.82%. StepStone Group has a consensus target price of $29.75, indicating a potential upside of 17.03%. Given StepStone Group’s stronger consensus rating and higher probable upside, analysts plainly believe StepStone Group is more favorable than Federated Hermes.

Valuation and Earnings

This table compares Federated Hermes and StepStone Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Federated Hermes $1.33 billion 1.98 $272.34 million $2.69 9.84
StepStone Group N/A N/A N/A N/A N/A

Federated Hermes has higher revenue and earnings than StepStone Group.

Summary

Federated Hermes beats StepStone Group on 6 of the 9 factors compared between the two stocks.

Federated Hermes Company Profile

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.

StepStone Group Company Profile

StepStone Group Inc. is an investment firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, and buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, consumer staples , financials, telecommunication services, energy, infrastructure, real estate, and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. It typically invests between $15 million and $200 million in firms with enterprise value between $150 million and $25000 million. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and International funds. It also seeks to make co-investments and follow on investments and considers partial interests in funds. StepStone Group LP was founded in 2007 and is based in New York, New York with additional offices across North America, Europe, Australia, and Asia.

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