Hubbell Inc's Dividend Analysis
Assessing the Sustainability and Growth of Hubbell Inc's Dividends
Hubbell Inc (NYSE:HUBB) recently announced a dividend of $1.22 per share, payable on 2023-12-15, with the ex-dividend date set for 2023-11-29. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Hubbell Inc's dividend performance and assess its sustainability.
What Does Hubbell Inc Do?
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Hubbell is a diversified conglomerate industrial company that mostly competes in the electrical components market. Its products and services serve vital portions of the U.S. electrical supply chain, including transmission and distribution as well as the commercial, industrial, and residential end markets. The company organizes its business into two segments: electrical and power systems. The consolidated business sells about two thirds of its products via distributors, with the remainder sold via direct sales to utilities and contractors. The 2018 acquisition of Aclara, folded into the utility solutions segment, brought Hubbell a portfolio of smart meters and communication sensors that serves electrical, water, and gas utilities.
A Glimpse at Hubbell Inc's Dividend History
Hubbell Inc has maintained a consistent dividend payment record since 1984, distributing dividends on a quarterly basis. The company has increased its dividend each year since then, earning it the status of a dividend aristocratan accolade reserved for companies with at least 39 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Hubbell Inc's Dividend Yield and Growth
As of today, Hubbell Inc currently has a 12-month trailing dividend yield of 1.49% and a 12-month forward dividend yield of 1.63%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, Hubbell Inc's annual dividend growth rate was 7.60%. This rate increased to 8.30% per year over a five-year horizon, and over the past decade, Hubbell Inc's annual dividends per share growth rate stands at 10.00%. Based on Hubbell Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Hubbell Inc stock as of today is approximately 2.22%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2023-09-30, Hubbell Inc's dividend payout ratio is 0.34, suggesting that the company retains a significant part of its earnings for future growth and unexpected downturns. Hubbell Inc's profitability rank of 9 out of 10, combined with a decade-long track record of positive net income, indicates robust profitability prospects.
Growth Metrics: The Future Outlook
Hubbell Inc's strong growth rank of 9 out of 10 signals a positive growth trajectory. The company's revenue per share and 3-year revenue growth rate of 8.20% annually outperforms approximately 55.36% of global competitors. The 3-year EPS growth rate of 13.60% per year and the 5-year EBITDA growth rate of 8.70% also outperform the majority of global competitors, underscoring the company's ability to sustain dividends.
Engaging Conclusion: Hubbell Inc's Dividend Outlook
Considering Hubbell Inc's dividend payments, growth rate, payout ratio, profitability, and growth metrics, the company presents a compelling case for value investors seeking reliable and growing income streams. With a proven track record as a dividend aristocrat and robust financial health, Hubbell Inc stands out as a potentially strong candidate for dividend portfolios. Will Hubbell Inc continue its legacy of dividend excellence? Only time will tell, but the indicators suggest a positive outlook. For those interested in exploring further, GuruFocus Premium offers tools like the High Dividend Yield Screener to discover high-dividend yield stocks.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
