Rockwell Automation (NYSE: ROK) and Hubbell (NYSE:HUBB) are both mid-cap industrial products companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Profitability

This table compares Rockwell Automation and Hubbell’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rockwell Automation 13.04% 40.71% 12.03%
Hubbell 8.23% 19.77% 8.97%

Valuation & Earnings

This table compares Rockwell Automation and Hubbell’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rockwell Automation $6.18 billion 3.86 $1.22 billion $6.20 29.98
Hubbell $3.56 billion 1.81 $606.70 million $5.28 22.36

Rockwell Automation has higher revenue and earnings than Hubbell. Hubbell is trading at a lower price-to-earnings ratio than Rockwell Automation, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

73.6% of Rockwell Automation shares are owned by institutional investors. Comparatively, 85.1% of Hubbell shares are owned by institutional investors. 1.7% of Rockwell Automation shares are owned by insiders. Comparatively, 1.3% of Hubbell shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Rockwell Automation pays an annual dividend of $3.04 per share and has a dividend yield of 1.6%. Hubbell pays an annual dividend of $2.80 per share and has a dividend yield of 2.4%. Rockwell Automation pays out 49.0% of its earnings in the form of a dividend. Hubbell pays out 53.0% 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. Rockwell Automation has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Rockwell Automation and Hubbell, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rockwell Automation 1 11 2 0 2.07
Hubbell 0 3 1 0 2.25

Rockwell Automation currently has a consensus price target of $159.42, indicating a potential downside of 14.24%. Hubbell has a consensus price target of $122.00, indicating a potential upside of 3.35%. Given Hubbell’s stronger consensus rating and higher probable upside, analysts plainly believe Hubbell is more favorable than Rockwell Automation.

Risk & Volatility

Rockwell Automation has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Hubbell has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Summary

Rockwell Automation beats Hubbell on 13 of the 17 factors compared between the two stocks.

Rockwell Automation Company Profile

Rockwell Automation, Inc. (Rockwell Automation) is a provider of industrial automation power, control and information solutions for manufacturers. The Company operates through two segments: Architecture & Software and Control Products & Solutions. The Architecture & Software segment contains various hardware, software and communication components of the Company’s integrated control and information architecture capable of controlling the customer’s industrial processes and connecting with their manufacturing enterprise. Architecture & Software has a portfolio of products, including Control platforms that perform multiple control disciplines and monitoring of applications, including discrete, batch and continuous process, drives control, motion control and machine safety control. The Control Products & Solutions segment portfolio includes low and medium voltage electro-mechanical and electronic motor starters, signaling devices, termination and protection devices, relays and timers.

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.

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