Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Hubbell Inc., solvency ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The financial leverage ratios demonstrate a consistent decline over the five-year period, indicating a gradual reduction in reliance on debt financing relative to equity. Both the "Debt to equity" and "Debt to equity (including operating lease liability)" ratios decreased steadily from 1.01 in 2018 to 0.61 and 0.66 respectively in 2022, reflecting an improvement in the company's capital structure and reduced financial risk.
Similarly, the "Debt to capital" and "Debt to capital (including operating lease liability)" ratios show a downward trend. The former declined from 0.50 in 2018 to 0.38 in 2022, while the latter decreased from 0.50 to 0.40 during the same time frame. This suggests the company has been reducing the proportion of debt within its overall capital base.
The "Debt to assets" ratio also followed a decreasing pattern, dropping from 0.37 in 2018 to 0.27 in 2022. Including operating lease liabilities, the ratio moved from 0.37 to 0.29. These changes indicate a lower reliance on debt relative to total assets, enhancing the company's asset financing stability.
Financial leverage ratios gradually declined from 2.74 in 2018 to 2.29 in 2022, consistent with the observed reductions in debt-related ratios. This trend reflects a more conservative financial structure and potentially lower financial risk associated with the company's liabilities.
Interest coverage ratios reveal an improving capacity to meet interest obligations. The ratio increased from 7.45 in 2018 to 14.25 in 2022, demonstrating substantially enhanced earnings available for interest payments and suggesting strengthened operational performance or reduced interest expenses.
Fixed charge coverage ratios similarly increased over the period, from 4.98 in 2018 to 8.70 in 2022. This upward trend indicates an improved ability to cover fixed charges, including lease payments and other obligations, pointing to greater financial flexibility and reduced default risk.
Overall, the financial data suggest a positive trajectory in the company’s financial stability. There is a clear movement toward reduced leverage and improved coverage ratios, which enhance the creditworthiness and resilience of the company against financial distress.
Debt Ratios
Coverage Ratios
Debt to Equity
Hubbell Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt and current portion of long-term debt | 4,700) | 9,700) | 153,100) | 65,400) | 56,100) | |
| Long-term debt, excluding current portion | 1,437,900) | 1,435,500) | 1,436,900) | 1,506,000) | 1,737,100) | |
| Total debt | 1,442,600) | 1,445,200) | 1,590,000) | 1,571,400) | 1,793,200) | |
| Total Hubbell Incorporated shareholders’ equity | 2,360,900) | 2,229,800) | 2,070,000) | 1,947,100) | 1,780,600) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.61 | 0.65 | 0.77 | 0.81 | 1.01 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 2.33 | 2.29 | 2.42 | — | — | |
| Eaton Corp. plc | 0.51 | 0.52 | 0.54 | — | — | |
| GE Aerospace | 0.89 | 0.87 | 2.11 | — | — | |
| Honeywell International Inc. | 1.17 | 1.06 | 1.28 | — | — | |
| Lockheed Martin Corp. | 1.68 | 1.07 | 2.02 | — | — | |
| RTX Corp. | 0.44 | 0.43 | 0.44 | — | — | |
| Debt to Equity, Sector | ||||||
| Capital Goods | 1.33 | 1.26 | 1.75 | — | — | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.42 | 1.37 | 1.82 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity = Total debt ÷ Total Hubbell Incorporated shareholders’ equity
= 1,442,600 ÷ 2,360,900 = 0.61
2 Click competitor name to see calculations.
- Total Debt
-
The total debt exhibits a decreasing trend over the five-year period. Starting from approximately 1,793,200 thousand US dollars at the end of 2018, it declined to 1,442,600 thousand US dollars by the end of 2022. The most significant drop occurred between 2019 and 2021, indicating an active reduction of debt levels by the company during this timeframe.
- Total Shareholders’ Equity
-
The total shareholders’ equity shows consistent growth throughout the period. Beginning at 1,780,600 thousand US dollars at the end of 2018, it increased steadily each year and reached 2,360,900 thousand US dollars by the end of 2022. This upward trend suggests a strengthening financial foundation and possibly retained earnings accumulation or equity issuance.
- Debt to Equity Ratio
-
The debt to equity ratio presents a clear downward trend, decreasing from 1.01 in 2018 to 0.61 in 2022. This decline aligns with the reduction in total debt alongside growth in shareholders’ equity, indicating an improving balance sheet with lower leverage and a more conservative capital structure over time.
Debt to Equity (including Operating Lease Liability)
Hubbell Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt and current portion of long-term debt | 4,700) | 9,700) | 153,100) | 65,400) | 56,100) | |
| Long-term debt, excluding current portion | 1,437,900) | 1,435,500) | 1,436,900) | 1,506,000) | 1,737,100) | |
| Total debt | 1,442,600) | 1,445,200) | 1,590,000) | 1,571,400) | 1,793,200) | |
| Current operating lease liabilities | 30,500) | 27,100) | 32,100) | 29,600) | —) | |
| Non-current operating lease liabilities | 84,900) | 58,300) | 74,900) | 71,700) | —) | |
| Total debt (including operating lease liability) | 1,558,000) | 1,530,600) | 1,697,000) | 1,672,700) | 1,793,200) | |
| Total Hubbell Incorporated shareholders’ equity | 2,360,900) | 2,229,800) | 2,070,000) | 1,947,100) | 1,780,600) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.66 | 0.69 | 0.82 | 0.86 | 1.01 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 2.37 | 2.33 | 2.46 | — | — | |
| Eaton Corp. plc | 0.54 | 0.55 | 0.57 | — | — | |
| GE Aerospace | 0.96 | 0.94 | 2.20 | — | — | |
| Honeywell International Inc. | 1.23 | 1.11 | 1.32 | — | — | |
| Lockheed Martin Corp. | 1.81 | 1.19 | 2.21 | — | — | |
| RTX Corp. | 0.47 | 0.46 | 0.47 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 1.39 | 1.32 | 1.81 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.59 | 1.54 | 2.00 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Hubbell Incorporated shareholders’ equity
= 1,558,000 ÷ 2,360,900 = 0.66
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period ending in 2022.
- Total Debt (including operating lease liability)
- The total debt exhibits a general decline from 2018 through 2021, decreasing from approximately $1,793 million to $1,531 million. In 2022, there is a slight increase to about $1,558 million. This pattern indicates an overall reduction in debt levels over the period, with a minor uptick in the latest year.
- Total Shareholders’ Equity
- Shareholders’ equity shows a consistent increase each year, moving from roughly $1,781 million in 2018 to approximately $2,361 million in 2022. This steady growth reflects positive retained earnings or other equity increases, strengthening the company’s net asset base over the period.
- Debt to Equity Ratio (including operating lease liability)
- The debt to equity ratio steadily decreases from 1.01 in 2018 to 0.66 in 2022. This decline signifies an improvement in financial leverage, with the company relying less on debt relative to equity, enhancing its financial stability.
Overall, the data indicates a strengthening balance sheet characterized by gradually decreasing debt levels, consistent growth in equity, and an improving debt to equity ratio. The company appears to be de-leveraging and reinforcing its capital structure over the observed period.
Debt to Capital
Hubbell Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt and current portion of long-term debt | 4,700) | 9,700) | 153,100) | 65,400) | 56,100) | |
| Long-term debt, excluding current portion | 1,437,900) | 1,435,500) | 1,436,900) | 1,506,000) | 1,737,100) | |
| Total debt | 1,442,600) | 1,445,200) | 1,590,000) | 1,571,400) | 1,793,200) | |
| Total Hubbell Incorporated shareholders’ equity | 2,360,900) | 2,229,800) | 2,070,000) | 1,947,100) | 1,780,600) | |
| Total capital | 3,803,500) | 3,675,000) | 3,660,000) | 3,518,500) | 3,573,800) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.38 | 0.39 | 0.43 | 0.45 | 0.50 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Boeing Co. | 1.39 | 1.35 | 1.40 | — | — | |
| Caterpillar Inc. | 0.70 | 0.70 | 0.71 | — | — | |
| Eaton Corp. plc | 0.34 | 0.34 | 0.35 | — | — | |
| GE Aerospace | 0.47 | 0.47 | 0.68 | — | — | |
| Honeywell International Inc. | 0.54 | 0.51 | 0.56 | — | — | |
| Lockheed Martin Corp. | 0.63 | 0.52 | 0.67 | — | — | |
| RTX Corp. | 0.31 | 0.30 | 0.31 | — | — | |
| Debt to Capital, Sector | ||||||
| Capital Goods | 0.57 | 0.56 | 0.64 | — | — | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.59 | 0.58 | 0.65 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 1,442,600 ÷ 3,803,500 = 0.38
2 Click competitor name to see calculations.
- Total Debt
- The total debt decreased from 1,793,200 thousand US dollars in 2018 to 1,442,600 thousand US dollars in 2022. This represents a reduction of approximately 19.5% over the five-year period, with a noted decline from 2018 to 2019, a slight increase in 2020, followed by consistent decreases through 2022.
- Total Capital
- Total capital exhibited a moderate increase over the same period, rising from 3,573,800 thousand US dollars in 2018 to 3,803,500 thousand US dollars in 2022. The upward movement was relatively steady, with minor fluctuations but an overall growth trend totaling roughly 6.3%.
- Debt to Capital Ratio
- The debt to capital ratio showed a clear downward trend, decreasing from 0.50 in 2018 to 0.38 in 2022. This decline indicates a gradual reduction in leverage, suggesting a strengthened capital structure and potentially lower financial risk.
Debt to Capital (including Operating Lease Liability)
Hubbell Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt and current portion of long-term debt | 4,700) | 9,700) | 153,100) | 65,400) | 56,100) | |
| Long-term debt, excluding current portion | 1,437,900) | 1,435,500) | 1,436,900) | 1,506,000) | 1,737,100) | |
| Total debt | 1,442,600) | 1,445,200) | 1,590,000) | 1,571,400) | 1,793,200) | |
| Current operating lease liabilities | 30,500) | 27,100) | 32,100) | 29,600) | —) | |
| Non-current operating lease liabilities | 84,900) | 58,300) | 74,900) | 71,700) | —) | |
| Total debt (including operating lease liability) | 1,558,000) | 1,530,600) | 1,697,000) | 1,672,700) | 1,793,200) | |
| Total Hubbell Incorporated shareholders’ equity | 2,360,900) | 2,229,800) | 2,070,000) | 1,947,100) | 1,780,600) | |
| Total capital (including operating lease liability) | 3,918,900) | 3,760,400) | 3,767,000) | 3,619,800) | 3,573,800) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.40 | 0.41 | 0.45 | 0.46 | 0.50 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 1.37 | 1.34 | 1.39 | — | — | |
| Caterpillar Inc. | 0.70 | 0.70 | 0.71 | — | — | |
| Eaton Corp. plc | 0.35 | 0.36 | 0.36 | — | — | |
| GE Aerospace | 0.49 | 0.49 | 0.69 | — | — | |
| Honeywell International Inc. | 0.55 | 0.53 | 0.57 | — | — | |
| Lockheed Martin Corp. | 0.64 | 0.54 | 0.69 | — | — | |
| RTX Corp. | 0.32 | 0.31 | 0.32 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.58 | 0.57 | 0.64 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.61 | 0.61 | 0.67 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 1,558,000 ÷ 3,918,900 = 0.40
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt exhibited a declining trend from 2018 to 2021, decreasing from approximately $1.79 billion to about $1.53 billion. However, in 2022, there was a slight increase in total debt, rising to approximately $1.56 billion. This overall pattern indicates a strategic reduction in debt levels over the four years, followed by a modest uptick in the most recent period.
- Total Capital (including operating lease liability)
- Total capital showed a gradual increase over the five-year period. Beginning at around $3.57 billion in 2018, it rose steadily to nearly $3.92 billion in 2022. This consistent growth suggests an expansion in the company's capital base and potentially reflects reinvested earnings or additional capital inflows.
- Debt to Capital Ratio (including operating lease liability)
- The debt to capital ratio decreased incrementally from 0.50 in 2018 to 0.40 in 2022. This decline indicates an improvement in the company's capital structure, with a lower proportion of debt relative to overall capital. This trend aligns with the observed reduction in total debt and increase in total capital, suggesting a strengthened financial position over the analyzed period.
Debt to Assets
Hubbell Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt and current portion of long-term debt | 4,700) | 9,700) | 153,100) | 65,400) | 56,100) | |
| Long-term debt, excluding current portion | 1,437,900) | 1,435,500) | 1,436,900) | 1,506,000) | 1,737,100) | |
| Total debt | 1,442,600) | 1,445,200) | 1,590,000) | 1,571,400) | 1,793,200) | |
| Total assets | 5,402,600) | 5,281,500) | 5,085,100) | 4,903,000) | 4,872,100) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.27 | 0.27 | 0.31 | 0.32 | 0.37 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Boeing Co. | 0.42 | 0.42 | 0.42 | — | — | |
| Caterpillar Inc. | 0.45 | 0.46 | 0.47 | — | — | |
| Eaton Corp. plc | 0.25 | 0.25 | 0.25 | — | — | |
| GE Aerospace | 0.17 | 0.18 | 0.30 | — | — | |
| Honeywell International Inc. | 0.31 | 0.30 | 0.35 | — | — | |
| Lockheed Martin Corp. | 0.29 | 0.23 | 0.24 | — | — | |
| RTX Corp. | 0.20 | 0.20 | 0.20 | — | — | |
| Debt to Assets, Sector | ||||||
| Capital Goods | 0.28 | 0.28 | 0.32 | — | — | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.31 | 0.30 | 0.33 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 1,442,600 ÷ 5,402,600 = 0.27
2 Click competitor name to see calculations.
The financial data reveals several notable trends regarding the company's leverage and asset base over the five-year period ending in 2022.
- Total debt
- The total debt figures demonstrate a general declining trend from 2018 to 2022. Starting at approximately 1.79 billion US dollars in 2018, the debt decreased to about 1.57 billion in 2019, followed by a slight increase to 1.59 billion in 2020. Subsequently, debt levels fell notably to approximately 1.45 billion in 2021 and remained nearly steady at 1.44 billion in 2022. This suggests a strategic reduction in leverage or repayment of obligations over the latter years.
- Total assets
- Total assets displayed consistent growth throughout the period, increasing steadily from around 4.87 billion US dollars in 2018 to approximately 5.40 billion by the end of 2022. This upward trend indicates expansion or accumulation of resources, reflecting possibly reinvestment or acquisition activities contributing to asset growth.
- Debt to assets ratio
- The ratio of debt to assets showed a pronounced decline over the timeline, falling from 0.37 in 2018 to 0.27 by 2021 and maintaining that level into 2022. The decreasing ratio aligns with the observed debt reduction combined with asset growth, implying improved financial stability and potentially lowered financial risk as the company relies less on debt relative to its asset base.
In summary, the company strengthened its balance sheet position by reducing total debt while increasing its asset base, leading to a more conservative debt-to-asset ratio. This trend suggests enhanced financial health and an improved capacity to manage liabilities against its assets.
Debt to Assets (including Operating Lease Liability)
Hubbell Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt and current portion of long-term debt | 4,700) | 9,700) | 153,100) | 65,400) | 56,100) | |
| Long-term debt, excluding current portion | 1,437,900) | 1,435,500) | 1,436,900) | 1,506,000) | 1,737,100) | |
| Total debt | 1,442,600) | 1,445,200) | 1,590,000) | 1,571,400) | 1,793,200) | |
| Current operating lease liabilities | 30,500) | 27,100) | 32,100) | 29,600) | —) | |
| Non-current operating lease liabilities | 84,900) | 58,300) | 74,900) | 71,700) | —) | |
| Total debt (including operating lease liability) | 1,558,000) | 1,530,600) | 1,697,000) | 1,672,700) | 1,793,200) | |
| Total assets | 5,402,600) | 5,281,500) | 5,085,100) | 4,903,000) | 4,872,100) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.29 | 0.29 | 0.33 | 0.34 | 0.37 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Boeing Co. | 0.43 | 0.43 | 0.43 | — | — | |
| Caterpillar Inc. | 0.46 | 0.46 | 0.48 | — | — | |
| Eaton Corp. plc | 0.26 | 0.27 | 0.27 | — | — | |
| GE Aerospace | 0.19 | 0.19 | 0.31 | — | — | |
| Honeywell International Inc. | 0.33 | 0.32 | 0.36 | — | — | |
| Lockheed Martin Corp. | 0.32 | 0.26 | 0.26 | — | — | |
| RTX Corp. | 0.21 | 0.21 | 0.21 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Capital Goods | 0.30 | 0.29 | 0.33 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.34 | 0.34 | 0.36 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 1,558,000 ÷ 5,402,600 = 0.29
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt exhibited a declining trend from 2018 to 2021, decreasing from approximately 1,793,200 thousand US dollars to 1,530,600 thousand US dollars. However, in 2022, there was a slight increase to 1,558,000 thousand US dollars. This indicates a reduction in leverage over the initial four years followed by a modest rise in the last observed year.
- Total Assets
- Total assets showed a consistent upward trajectory across the period analyzed. Starting at 4,872,100 thousand US dollars in 2018, total assets increased annually to reach 5,402,600 thousand US dollars by the end of 2022. This steady growth suggests an expansion in the asset base over the five-year period.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio decreased progressively from 0.37 in 2018 to 0.29 by 2021, remaining stable at 0.29 in 2022. This declining ratio reflects an improvement in financial leverage, implying that the relative proportion of debt compared to total assets has reduced, enhancing the company’s solvency position.
Financial Leverage
Hubbell Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 5,402,600) | 5,281,500) | 5,085,100) | 4,903,000) | 4,872,100) | |
| Total Hubbell Incorporated shareholders’ equity | 2,360,900) | 2,229,800) | 2,070,000) | 1,947,100) | 1,780,600) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.29 | 2.37 | 2.46 | 2.52 | 2.74 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 5.16 | 5.02 | 5.11 | — | — | |
| Eaton Corp. plc | 2.06 | 2.07 | 2.13 | — | — | |
| GE Aerospace | 5.16 | 4.93 | 7.13 | — | — | |
| Honeywell International Inc. | 3.73 | 3.47 | 3.68 | — | — | |
| Lockheed Martin Corp. | 5.71 | 4.64 | 8.43 | — | — | |
| RTX Corp. | 2.19 | 2.21 | 2.25 | — | — | |
| Financial Leverage, Sector | ||||||
| Capital Goods | 4.71 | 4.55 | 5.54 | — | — | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.65 | 4.52 | 5.49 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Financial leverage = Total assets ÷ Total Hubbell Incorporated shareholders’ equity
= 5,402,600 ÷ 2,360,900 = 2.29
2 Click competitor name to see calculations.
The financial data indicates a consistent growth in total assets over the five-year period, increasing from approximately 4.87 billion US dollars at the end of 2018 to about 5.40 billion US dollars by the end of 2022. This suggests ongoing asset accumulation or investment by the company.
Shareholders' equity has also shown a steady upward trend. Starting at roughly 1.78 billion US dollars in 2018, it rose annually to reach over 2.36 billion US dollars by the close of 2022. This growth in equity implies an increase in the net worth of the company, potentially driven by retained earnings or additional equity financing.
Correspondingly, the financial leverage ratio has demonstrated a gradual decline over the same period. The ratio decreased from 2.74 in 2018 to 2.29 in 2022, indicating a reduction in the relative level of debt financing compared to equity. This trend signifies a potential strengthening of the company’s capital structure, reflecting lower financial risk due to decreased reliance on debt.
- Total assets
- Increased steadily year-over-year, indicating asset growth and potential reinvestment.
- Shareholders’ equity
- Consistently rose, pointing to improved net worth and stronger equity base.
- Financial leverage
- Decreased gradually, signaling reduced debt utilization and enhanced financial stability.
Interest Coverage
Hubbell Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Hubbell Incorporated | 545,900) | 399,500) | 351,200) | 400,900) | 360,200) | |
| Add: Net income attributable to noncontrolling interest | 5,500) | 6,100) | 4,800) | 6,500) | 5,900) | |
| Less: Income from discontinued operations, net of tax | 34,600) | 34,500) | —) | —) | —) | |
| Add: Income tax expense | 140,200) | 88,200) | 97,500) | 113,100) | 100,900) | |
| Add: Interest expense, net | 49,600) | 54,700) | 60,300) | 69,400) | 72,400) | |
| Earnings before interest and tax (EBIT) | 706,600) | 514,000) | 513,800) | 589,900) | 539,400) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 14.25 | 9.40 | 8.52 | 8.50 | 7.45 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Boeing Co. | -0.98 | -0.88 | -5.71 | — | — | |
| Caterpillar Inc. | 20.80 | 17.88 | 8.80 | — | — | |
| Eaton Corp. plc | 21.22 | 21.11 | 12.72 | — | — | |
| GE Aerospace | 1.88 | -0.96 | 2.59 | — | — | |
| Honeywell International Inc. | 16.41 | 22.09 | 17.75 | — | — | |
| Lockheed Martin Corp. | 11.72 | 14.27 | 14.93 | — | — | |
| RTX Corp. | 5.64 | 4.71 | -0.65 | — | — | |
| Interest Coverage, Sector | ||||||
| Capital Goods | 4.84 | 3.98 | 1.99 | — | — | |
| Interest Coverage, Industry | ||||||
| Industrials | 4.98 | 5.14 | 1.25 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 706,600 ÷ 49,600 = 14.25
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several significant trends related to earnings before interest and tax (EBIT), interest expense, and interest coverage.
- Earnings Before Interest and Tax (EBIT)
- The EBIT demonstrates a fluctuating pattern with an overall upward trend. Starting at approximately 539.4 million US dollars in 2018, EBIT increased to 589.9 million in 2019, then declined to about 513.8 million in 2020 and remained almost stable in 2021 at 514.0 million. In 2022, EBIT showed a substantial increase to 706.6 million, representing a marked improvement compared to previous years.
- Interest Expense, Net
- The net interest expense consistently decreased over the analyzed period. It started at 72.4 million US dollars in 2018 and steadily declined each year to 69.4 million in 2019, 60.3 million in 2020, 54.7 million in 2021, and reached its lowest point of 49.6 million in 2022. This reduction indicates a successful management of financing costs or refinancing at more favorable rates.
- Interest Coverage Ratio
- The interest coverage ratio exhibited a consistent and significant improvement across the years. Beginning at 7.45 in 2018, it rose to 8.5 in 2019, then slightly increased to 8.52 in 2020. The upward trend continued with a notable increase to 9.4 in 2021 and a more pronounced jump to 14.25 in 2022. This improvement reflects the company's enhanced ability to meet interest obligations from its EBIT, indicating strengthened financial stability and reduced risk related to interest payments.
In summary, the company's operational earnings experienced some volatility with a strong rebound in the final year, while interest expenses steadily decreased. Consequently, the interest coverage ratio improved markedly, suggesting a healthier balance between earnings and debt service costs. These trends collectively point to strengthened financial performance and improved creditworthiness over the period analyzed.
Fixed Charge Coverage
Hubbell Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Hubbell Incorporated | 545,900) | 399,500) | 351,200) | 400,900) | 360,200) | |
| Add: Net income attributable to noncontrolling interest | 5,500) | 6,100) | 4,800) | 6,500) | 5,900) | |
| Less: Income from discontinued operations, net of tax | 34,600) | 34,500) | —) | —) | —) | |
| Add: Income tax expense | 140,200) | 88,200) | 97,500) | 113,100) | 100,900) | |
| Add: Interest expense, net | 49,600) | 54,700) | 60,300) | 69,400) | 72,400) | |
| Earnings before interest and tax (EBIT) | 706,600) | 514,000) | 513,800) | 589,900) | 539,400) | |
| Add: Rent expense for operating leases | 35,700) | 34,100) | 37,100) | 39,100) | 44,800) | |
| Earnings before fixed charges and tax | 742,300) | 548,100) | 550,900) | 629,000) | 584,200) | |
| Interest expense, net | 49,600) | 54,700) | 60,300) | 69,400) | 72,400) | |
| Rent expense for operating leases | 35,700) | 34,100) | 37,100) | 39,100) | 44,800) | |
| Fixed charges | 85,300) | 88,800) | 97,400) | 108,500) | 117,200) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 8.70 | 6.17 | 5.66 | 5.80 | 4.98 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Boeing Co. | -0.70 | -0.64 | -4.75 | — | — | |
| Caterpillar Inc. | 14.92 | 12.73 | 6.58 | — | — | |
| Eaton Corp. plc | 10.01 | 10.40 | 6.24 | — | — | |
| GE Aerospace | 1.35 | -0.22 | 1.93 | — | — | |
| Honeywell International Inc. | 11.00 | 13.67 | 11.49 | — | — | |
| Lockheed Martin Corp. | 8.44 | 9.95 | 11.12 | — | — | |
| RTX Corp. | 4.40 | 3.66 | -0.22 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Capital Goods | 3.61 | 3.06 | 1.66 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 3.30 | 3.44 | 1.12 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 742,300 ÷ 85,300 = 8.70
2 Click competitor name to see calculations.
- Earnings Before Fixed Charges and Tax
- The earnings before fixed charges and tax showed an overall fluctuating trend over the five-year period. Starting at 584,200 thousand US dollars in 2018, it increased to 629,000 thousand in 2019. However, earnings decreased in the following two years, falling to 550,900 thousand in 2020 and stabilizing at 548,100 thousand in 2021. A significant recovery occurred in 2022, with earnings rising sharply to 742,300 thousand, marking the highest value in the period analyzed.
- Fixed Charges
- Fixed charges exhibited a consistent downward trend throughout the period. Beginning at 117,200 thousand US dollars in 2018, fixed charges decreased steadily each year to reach 85,300 thousand in 2022. This indicates a reduction in fixed financial obligations which could positively affect the company's operating leverage and financial flexibility.
- Fixed Charge Coverage Ratio
- The fixed charge coverage ratio improved notably during the period analyzed. Starting at 4.98 in 2018, it increased to 5.8 in 2019 despite the declining earnings in later years. It remained relatively stable in 2020 and 2021 at 5.66 and 6.17, respectively. A marked increase was observed in 2022, where the ratio rose sharply to 8.7. This improvement is attributable to both the rebound in earnings before fixed charges and tax and the consistent decline in fixed charges, reflecting enhanced ability to cover fixed financial obligations.