Hubbell (NYSE: HUBB) and Regal Beloit Corporation (NYSE:RBC) are both mid-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Volatility and Risk

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.

Valuation and Earnings

This table compares Hubbell and Regal Beloit Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hubbell $3.56 billion 1.83 $606.70 million $5.28 22.59
Regal Beloit Corporation $3.22 billion 1.17 $500.30 million $4.61 18.21

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.

Dividends

Hubbell pays an annual dividend of $2.80 per share and has a dividend yield of 2.3%. Regal Beloit Corporation pays an annual dividend of $1.04 per share and has a dividend yield of 1.2%. Hubbell pays out 53.0% of its earnings in the form of a dividend. Regal Beloit Corporation pays out 22.6% 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 increased its dividend for 7 consecutive years.

Profitability

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
Hubbell 8.52% 19.93% 9.05%
Regal Beloit Corporation 6.46% 9.80% 4.62%

Insider & Institutional Ownership

85.3% of Hubbell shares are held by institutional investors. Comparatively, 93.9% 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, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Hubbell and Regal Beloit Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hubbell 0 3 1 0 2.25
Regal Beloit Corporation 0 6 3 0 2.33

Hubbell presently has a consensus target price of $121.50, suggesting a potential upside of 1.86%. Regal Beloit Corporation has a consensus target price of $81.40, suggesting a potential downside of 3.04%. Given Hubbell’s higher probable upside, analysts clearly believe Hubbell is more favorable than Regal Beloit Corporation.

Summary

Hubbell beats Regal Beloit Corporation on 10 of the 17 factors compared between the two stocks.

Hubbell Company Profile

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.

Regal Beloit Corporation Company Profile

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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