Federated Hermes (NYSE:FHI) & LMP Capital and Income Fund (NYSE:SCD) Critical Contrast

Federated Hermes (NYSE:FHI) and LMP Capital and Income Fund (NYSE:SCD) are both financial services companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Insider & Institutional Ownership

75.9% of Federated Hermes shares are owned by institutional investors. 3.7% of Federated Hermes shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Federated Hermes and LMP Capital and Income Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Federated Hermes	15.90%	28.60%	15.36%
LMP Capital and Income Fund	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Federated Hermes and LMP Capital and Income Fund, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federated Hermes	0	3	2	0	2.40
LMP Capital and Income Fund	0	0	0	0	N/A

Federated Hermes currently has a consensus price target of $38.80, suggesting a potential upside of 0.52%. Given Federated Hermes’ higher probable upside, research analysts plainly believe Federated Hermes is more favorable than LMP Capital and Income Fund.

Valuation and Earnings

This table compares Federated Hermes and LMP Capital and Income Fund”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Federated Hermes	$1.59 billion	2.04	$298.98 million	$3.52	10.97
LMP Capital and Income Fund	$63.99 million	N/A	N/A	N/A	N/A

Federated Hermes has higher revenue and earnings than LMP Capital and Income Fund.

Dividends

Federated Hermes pays an annual dividend of $1.24 per share and has a dividend yield of 3.2%. LMP Capital and Income Fund pays an annual dividend of $1.35 per share and has a dividend yield of 7.9%. Federated Hermes pays out 35.2% of its earnings in the form of a dividend.

Summary

Federated Hermes beats LMP Capital and Income Fund on 8 of the 10 factors compared between the two stocks.

About Federated Hermes

Federated Hermes, Inc. is a publicly owned investment manager. 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.

About LMP Capital and Income Fund

LMP Capital and Income Fund Inc. is a closed ended balanced mutual fund launched and managed by Legg Mason Partners Fund Advisor, LLC. It is co-managed by Clearbridge Investments, LLC, Western Asset Management Company Limited, and Western Asset Management Company. The fund invests in public equity and fixed income markets across the globe. It seeks to invest in securities of companies operating across diversified sectors. The fund primarily invests in stocks of large-cap companies, intermediate period corporate bonds and notes rated at least A-, energy and non-energy master limited partnerships, and real estate investment trusts. It focuses on such factors as economic, market, or political conditions, fiscal and monetary policy, and security valuation to create its portfolio. The fund benchmarks the performance of its portfolio against the U.S. Aggregate Index and S&P 500 Index. It was formerly known as Salomon Brothers Capital and Income Fund Inc. LMP Capital and Income Fund Inc. was formed on November 12, 2003 and is domiciled in the United States.