Hubbell (NYSE: HUBB)
QVI Research Report | Initial Coverage | November 2023
Summary
QVI Real-Time Portfolios have achieved alpha for 14 years by focusing on a company’s current wealth and the stock’s present value.
Hubbell Incorporated is a high-quality mid-cap industrial conglomerate that consistently returns cash to shareholders and outperforms benchmarks.
The company’s current wealth analysis shows positive revenue growth, strong returns on management, and excellent coverage of long-term debt and current liabilities.
The stock price’s present value suggests shares are at fair value. However, Hubbell has a long history of outperformance with low to below-average downside risks.
QVI initiates its coverage of Hubbell in the Expanded Portfolio in this inaugural research report.
When referencing this report, premium (paying) subscribers can access their Quality Value Investing (QVI) Glossary of Investing Terms and Metric Targets. Unless noted, all data presented is sourced from Seeking Alpha Premium as of the market close on November 7, 2023, and intended for illustration only.
The stock picks in the QVI Real-Time Portfolios have achieved alpha for 14 years by focusing research and analysis solely on a company’s current wealth and its share price’s present value. In other words, just the facts without unreliable predictive analysis typical of the buy-side or the business modeling overkill of Wall Street analysts.
In this initial QVI Research Report, we’ll look at the highly regarded industrials sector stock Hubbell Incorporated to see if it meets Quality Value Investing’s active portfolio inclusion criteria based on our checklist analysis of the business’s current wealth and its stock’s present value.
Hubbell: Company Current Wealth
To uncover the current wealth of the company, QVI defines the value proposition, measures select returns on management, and assesses enterprise downside risks.
Value Proposition
Hubbell Incorporated HUBB 0.00%↑ is a dividend-paying mid-cap stock in the industrials sector’s electrical components and equipment industry.
Hubbell Incorporated, together with its subsidiaries, designs, manufactures, and sells electrical and utility solutions in the United States and internationally. It operates through two segments: Electrical Solutions and Utility Solutions.
The Electrical Solutions segment offers standard and special application wiring device products, rough-in electrical products, connector and grounding products, lighting fixtures, and other electrical equipment for use in industrial, commercial, and institutional facilities by electrical contractors, maintenance personnel, electricians, utilities, and telecommunications companies, as well as components and assemblies. It also designs and manufactures various industrial controls, and communication systems for use in the non-residential and industrial markets, as well as in the oil and gas and mining industries. This segment sells its products through electrical and industrial distributors, home centers, retail and hardware outlets, lighting showrooms, residential product-oriented internet sites, and special application products primarily through wholesale distributors to contractors, industrial customers, and original equipment manufacturers.
The Utility Solutions segment designs, manufactures, and sells electrical distribution, transmission, substation, and telecommunications products, such as arresters, insulators, connectors, anchors, bushings, and enclosures cutoffs and switches; and utility infrastructure products, including smart meters, communications systems, and protection and control devices. This segment sells its products to distributors. Its brand portfolio includes Hubbell, Kellems, Bryant, Burndy, CMC, Bell, TayMac, Wiegmann, Killark, Hawke, Aclara, Fargo, Quazite, and Hot Box.
Hubbell was founded in 1888 and is headquartered in Shelton, Connecticut, USA.
QVI’s value proposition elevator pitch for Hubbell:
Hubbell is a high-quality industrial conglomerate that consistently returns cash to shareholders as its shares outperform the benchmarks. The US grid is aging and needs modernization, and Hubbell is a leading infrastructure player in the rare political issue that draws bipartisan support.
Due Diligence Resources
For a more in-depth analysis of the all-important value proposition, visit Hubbell’s investor relations webpage and its most recent Form 10-K Annual Report submitted to the US Securities and Exchange Commission or SEC.
Performance vs. Sector and Market
The chart below illustrates Hubbell’s performance against the Industrials Select Sector SPDR® Fund ETF (NYSE: XLI) and the SPDR® S&P 500 ETF Trust (NYSE: SPY) during the trailing five-year period. Notably, HUBB has outperformed the sector and broader market by substantial margins.
QVI’s value proposition rating for Hubbell: Bullish.