Hubbell Inc's Dividend Analysis
Assessing the Sustainability of Hubbell Inc's Upcoming Dividend
Hubbell Inc (NYSE:HUBB) recently announced a dividend of $1.22 per share, payable on 2024-03-15, with the ex-dividend date set for 2024-02-28. 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: Utility Solutions Segment and the Electrical Solutions Segment. It derives maximum revenue from Utility Solutions Segment.
A Glimpse at Hubbell Inc's Dividend History
Hubbell Inc has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis.
Hubbell Inc has increased its dividend each year since 1984. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 40 years. 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 1.24% and a 12-month forward dividend yield of 1.32%. This suggests an expectation of increased dividend payments over the next 12 months.
Hubbell Inc's dividend yield of 1.24% is near a 10-year low and underperforms than 63.13% of global competitors in the Industrial Products industry, suggesting that the company's dividend yield may not be a compelling proposition for income investors.
Over the past three years, Hubbell Inc's annual dividend growth rate was 7.30%. Extended to a five-year horizon, this rate increased to 7.70% per year. And over the past decade, Hubbell Inc's annual dividends per share growth rate stands at 9.50%.
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 1.80%.
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. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Hubbell Inc's dividend payout ratio is 0.30.
Hubbell Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Hubbell Inc's profitability 9 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Hubbell Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Hubbell Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Hubbell Inc's revenue has increased by approximately 13.80% per year on average, a rate that outperforms approximately 68.8% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Hubbell Inc's earnings increased by approximately 29.00% per year on average, a rate that outperforms approximately 71.8% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 14.30%, which outperforms approximately 63.85% of global competitors.
Next Steps
In conclusion, Hubbell Inc's consistent dividend growth, prudent payout ratio, strong profitability, and robust growth metrics paint a promising picture for both current shareholders and potential investors. The company's ability to sustain and grow its dividends is supported by a solid financial foundation and a favorable growth outlook. As Hubbell Inc continues to navigate the complexities of the industrial products market, its commitment to returning value to shareholders remains evident. For those keen on exploring further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
