Head-To-Head Survey: Rexnord (RXN) vs. Hubbell (HUBB)

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

Institutional & Insider Ownership

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85.5% of Hubbell shares are owned by institutional investors. Comparatively, 99.8% of Rexnord shares are owned by institutional investors. 0.7% of Hubbell shares are owned by company insiders. Comparatively, 3.5% of Rexnord shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Hubbell 6.63% 20.16% 8.97%
Rexnord 8.29% 13.05% 4.27%

Analyst Ratings

This is a summary of current ratings and target prices for Hubbell and Rexnord, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hubbell 0 1 5 0 2.83
Rexnord 0 1 6 0 2.86

Hubbell presently has a consensus target price of $152.00, suggesting a potential upside of 29.48%. Rexnord has a consensus target price of $30.50, suggesting a potential upside of 4.70%. Given Hubbell’s higher possible upside, equities research analysts plainly believe Hubbell is more favorable than Rexnord.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hubbell $3.67 billion 1.75 $243.10 million $5.93 19.80
Rexnord $1.92 billion 1.58 $74.10 million $1.32 22.07

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

Risk & Volatility

Hubbell has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Rexnord has a beta of 1.6, meaning that its stock price is 60% more volatile than the S&P 500.

Dividends

Hubbell pays an annual dividend of $3.08 per share and has a dividend yield of 2.6%. Rexnord does not pay a dividend. Hubbell pays out 51.9% of its earnings in the form of a dividend.

Hubbell Company Profile

Hubbell Incorporated designs, manufactures, and sells electrical and electronic products in the United States and internationally. It operates through two segments, Electrical and Power. The Electrical segment offers standard and special application wiring device products, rough-in electrical products, connector and grounding products, lighting fixtures and controls, and other electrical equipment for use in industrial, commercial, and institutional facilities by electrical contractors, maintenance personnel, electricians, utilities, and telecommunications companies, as well as components and assemblies for the natural gas distribution market. It also designs and manufactures various high voltage test and measurement equipment, industrial controls, and communication systems for use in the non-residential and industrial markets, as well as in the oil and gas, and mining industries. This segment sells its products through electrical and industrial distributors, home centers, retail and hardware outlets, lighting showrooms, and residential product oriented Internet sites; special application products primarily through wholesale distributors to contractors, industrial customers, and original equipment manufacturers; and high voltage products directly to its customers through sales engineers. The Power segment designs, manufactures, and sells distribution, transmission, substation, and telecommunications products. This segment sells its products to distributors, as well as directly to users, such as utilities, telecommunication companies, pipeline and mining operations, industrial firms, construction and engineering firms, and civil construction and transportation industries. Hubbell Incorporated was founded in 1888 and is headquartered in Shelton, Connecticut.

Rexnord Company Profile

Rexnord Corporation designs, manufactures, and markets process and motion control, and water management products worldwide. The company operates in two segments, Process & Motion Control Platform and Water Management Platform. It offers table top conveying chain and related accessories, metal conveying and engineered woven metals, gearing and gear drives, conveying equipment, industrial chains, and custom assemblies; custom-engineered, application-specific miniature gearboxes, and motion control assemblies and components used in aerospace, defense, medical equipment, robotics, semiconductor, instrumentation, and satellite communications; and shaft management products, such as couplings, torque limiters, electromagnetic clutches and brakes, industrial bearings, and shaft locking assemblies. The company also provides valve products, engineered water distribution solutions, drainage products, and site works products; water conservation products; and water and wastewater infrastructure products. It sells products through independent sales representatives, plumbing wholesalers, sales agencies, and direct sales and marketing associates to commercial construction, institutional, infrastructure, and residential construction end markets. The company offers its products under the Rexnord, Rex, FlatTop, Falk, Link-Belt Cambridge, Addax, Euroflex, Omega, PSI, Shafer, Stearns, Highfield, Thomas, Tollok, Zurn, Wilkins, GA, Green Turtle, VAG, Aquaflush, AquaSense, AquaVantage, AquaSpec, EcoVantage, and Zurn One brands. Rexnord Corporation was incorporated in 2006 and is based in Milwaukee, Wisconsin.

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