Stock Analysis on Net

Hubbell Inc. (NYSE:HUBB)

$22.49

This company has been moved to the archive! The financial data has not been updated since November 1, 2023.

Enterprise Value to FCFF (EV/FCFF)

Microsoft Excel

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Free Cash Flow to The Firm (FCFF)

Hubbell Inc., FCFF calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net income attributable to Hubbell Incorporated
Net income attributable to noncontrolling interest
Net noncash charges
Changes in assets and liabilities, net of acquisitions
Net cash provided by operating activities
Interest and fees paid related to total indebtedness, net of tax1
Capital expenditures
Free cash flow to the firm (FCFF)

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 data reveals notable trends in the company's cash flow performance over the five-year period ending in 2022. Both net cash provided by operating activities and free cash flow to the firm (FCFF) exhibit fluctuations that reflect operational and investment dynamics.

Net cash provided by operating activities
This metric shows an overall increasing trend from 2018 through 2020, rising from $517.1 million to $648.0 million, indicating improved operational cash generation during this period. However, in 2021 there is a significant decline to $513.7 million, marking a reversal that suggests either operational challenges or increased working capital requirements. In 2022, the figure recovers to $636.2 million, approaching the previous peak seen in 2020, which may indicate a rebound in operational efficiency or stabilization after the dip in 2021.
Free cash flow to the firm (FCFF)
The FCFF follows a similar pattern to operating cash flow but with slightly lower absolute values throughout, reflecting the impact of investment expenditures. The values increase steadily from $467.5 million in 2018 to a peak of $602.3 million in 2020, mirroring the rising trend in operating cash flow. The decline in 2021 to $476.5 million is pronounced, consistent with the operational cash flow contraction. Recovery is observed in 2022, with FCFF rising to $544.3 million, indicating improved free cash flow availability, although it has not yet returned to the 2020 peak.

Overall, the data suggest a period of growth in cash generation capacity through 2020, followed by a downturn in 2021, potentially due to external or internal disruptions. The partial recovery in 2022 demonstrates resilience but may also indicate ongoing challenges in fully restoring cash flow levels to the highest observed values. The consistency in the relationship between operating cash flow and FCFF over time implies stable capital expenditure patterns relative to operating cash generation.


Interest Paid, Net of Tax

Hubbell Inc., interest paid, net of tax calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Effective Income Tax Rate (EITR)
EITR1
Interest Paid, Net of Tax
Interest and fees paid related to total indebtedness, before tax
Less: Interest and fees paid related to total indebtedness, tax2
Interest and fees paid related to total indebtedness, net of tax

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 See details »

2 2022 Calculation
Interest and fees paid related to total indebtedness, tax = Interest and fees paid related to total indebtedness × EITR
= × =


Effective Income Tax Rate (EITR)
The effective income tax rate remained relatively stable over the analyzed period, fluctuating within a narrow range. It started at 21.6% in 2018 and showed minimal variation, holding close to 21.5% through 2020. A noticeable dip occurred in 2021, when the rate decreased to 19.2%, representing the lowest point in the five-year span. However, in 2022, the rate rose again to 21.3%, nearly reverting to the levels observed prior to 2021. This pattern suggests a temporary reduction in tax obligations during 2021, followed by a return to previous rates.
Interest and Fees Paid Related to Total Indebtedness, Net of Tax (US$ in thousands)
The interest and fees paid exhibited more pronounced fluctuations. Beginning at $46,648 thousand in 2018, the amount increased modestly to $49,172 thousand in 2019. In 2020, a decline was observed, with payments falling to $42,704 thousand. This was followed by a noticeable rise in 2021, reaching a peak of $53,005 thousand, the highest value in the period. Subsequently, in 2022, the payment amount decreased significantly to $37,383 thousand, the lowest recorded figure in the five years. This variability may indicate changing debt levels, refinancing activities, or shifts in interest rates affecting the cost of indebtedness.

Enterprise Value to FCFF Ratio, Current

Hubbell Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in thousands)
Enterprise value (EV)
Free cash flow to the firm (FCFF)
Valuation Ratio
EV/FCFF
Benchmarks
EV/FCFF, Competitors1
Boeing Co.
Caterpillar Inc.
Eaton Corp. plc
GE Aerospace
Honeywell International Inc.
Lockheed Martin Corp.
RTX Corp.
EV/FCFF, Sector
Capital Goods
EV/FCFF, Industry
Industrials

Based on: 10-K (reporting date: 2022-12-31).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

Hubbell Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Selected Financial Data (US$ in thousands)
Enterprise value (EV)1
Free cash flow to the firm (FCFF)2
Valuation Ratio
EV/FCFF3
Benchmarks
EV/FCFF, Competitors4
Boeing Co.
Caterpillar Inc.
Eaton Corp. plc
GE Aerospace
Honeywell International Inc.
Lockheed Martin Corp.
RTX Corp.
EV/FCFF, Sector
Capital Goods
EV/FCFF, Industry
Industrials

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 See details »

2 See details »

3 2022 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =

4 Click competitor name to see calculations.


The analysis of the financial data reveals several noteworthy trends over the five-year period ending December 31, 2022.

Enterprise Value (EV):
The enterprise value demonstrates a consistent upward trajectory across the examined years. Beginning at approximately 8.09 billion US dollars in 2018, it steadily increased each year, culminating at around 13.89 billion US dollars in 2022. This progression indicates a growing valuation of the company’s overall market worth including equity and debt components.
Free Cash Flow to the Firm (FCFF):
Free cash flow to the firm exhibits a fluctuating pattern, albeit within a relatively narrow range. Starting at about 468 million US dollars in 2018, FCFF rose to a peak of approximately 602 million in 2020. However, it experienced a decline in 2021 to roughly 477 million, followed by a recovery to 544 million in 2022. This shows that while cash generation has generally improved since 2018, there was a noticeable dip in 2021.
EV to FCFF Ratio:
The EV/FCFF ratio remained relatively stable and moderate between 2018 and 2020, ranging from 17.3 to 17.04. However, from 2021 onwards, there was a significant increase, reaching 23.37 in 2021 and further rising to 25.53 in 2022. This suggests that the market valuation of the company relative to its free cash flow has expanded substantially in the last two years, possibly reflecting heightened investor expectations, valuation multiples, or changes in cash flow dynamics.

In summary, the company’s enterprise value has shown steady growth throughout the period, while free cash flow experienced some variability but generally improved. The rising EV/FCFF ratio in recent years indicates that valuation multiples have increased, which might suggest greater market optimism or perceived growth potential despite relatively stable or fluctuating cash flows.