Head-To-Head Review: Hubbell (HUBB) versus Regal Beloit Corporation (RBC)
Hubbell (NYSE: HUBB) and Regal Beloit Corporation (NYSE:RBC) are both mid-cap industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.
Hubbell pays an annual dividend of $2.80 per share and has a dividend yield of 2.4%. Regal Beloit Corporation pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. Hubbell pays out 53.0% of its earnings in the form of a dividend. Regal Beloit Corporation pays out 23.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Regal Beloit Corporation has raised its dividend for 7 consecutive years.
This table compares Hubbell and Regal Beloit Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Regal Beloit Corporation||6.29%||9.88%||4.79%|
This is a summary of recent ratings for Hubbell and Regal Beloit Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Regal Beloit Corporation||0||6||3||0||2.33|
Hubbell currently has a consensus price target of $121.50, indicating a potential upside of 5.63%. Regal Beloit Corporation has a consensus price target of $81.40, indicating a potential upside of 3.23%. Given Hubbell’s higher possible upside, analysts clearly believe Hubbell is more favorable than Regal Beloit Corporation.
Institutional and Insider Ownership
85.3% of Hubbell shares are held by institutional investors. Comparatively, 93.7% of Regal Beloit Corporation shares are held by institutional investors. 1.3% of Hubbell shares are held by company insiders. Comparatively, 2.2% of Regal Beloit Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Hubbell and Regal Beloit Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Hubbell||$3.56 billion||1.77||$606.70 million||$5.28||21.78|
|Regal Beloit Corporation||$3.25 billion||1.09||$469.10 million||$4.53||17.41|
Hubbell has higher revenue and earnings than Regal Beloit Corporation. Regal Beloit Corporation is trading at a lower price-to-earnings ratio than Hubbell, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Hubbell has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Regal Beloit Corporation has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500.
Hubbell beats Regal Beloit Corporation on 10 of the 17 factors compared between the two stocks.
Hubbell Incorporated is engaged in the design, manufacture and sale of electrical and electronic products for a range of non-residential and residential construction, industrial and utility applications. The Company’s segments include Electrical and the Power. The Electrical segment consists of businesses that sell stock and custom products, including standard and special application wiring device products, rough-in electrical products, lighting fixtures and controls, components and assemblies for the natural gas distribution market, as well as other electrical equipment. In addition, certain businesses design and manufacture a range of high voltage test and measurement equipment, industrial controls and communication systems used in the non-residential and industrial markets. The Power segment consists of operations that design and manufacture various distribution, transmission, substation and telecommunications products primarily used by the electrical utility industry.
About Regal Beloit Corporation
Regal Beloit Corporation is a manufacturer of electric motors, electrical motion controls, power generation and power transmission products. The Company operates through three segments: the Commercial and Industrial Systems segment, with its principal line of business in medium and large electric motors, power generation products, high-performance drives and controls and capacitors; the Climate Solutions segment, with its principal line of business in small motors, controls and air moving products, and the Power Transmission Solutions segment, with its principal line of business in power transmission gearing, hydraulic pump drives, open gearing and specialty mechanical products which control motion and torque. It sells its products directly to original equipment manufacturers (OEMs), distributors and end users. It operates distribution facilities in Plainfield, Indiana; McAllen, Texas; LaVergne, Tennessee, and Florence, Kentucky.
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