Critical Review: Hubbell (NYSE:HUBB) and Nextpower (NASDAQ:NXT)

Hubbell (NYSE:HUBB) and Nextpower (NASDAQ:NXT) are both large-cap industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hubbell	14.49%	27.11%	11.48%
Nextpower	16.36%	26.29%	15.02%

Analyst Ratings

This is a summary of current recommendations and price targets for Hubbell and Nextpower, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hubbell	0	5	5	1	2.64
Nextpower	0	4	23	1	2.89

Hubbell presently has a consensus target price of $551.78, suggesting a potential upside of 15.95%. Nextpower has a consensus target price of $143.19, suggesting a potential upside of 69.86%. Given Nextpower’s stronger consensus rating and higher probable upside, analysts plainly believe Nextpower is more favorable than Hubbell.

Earnings and Valuation

This table compares Hubbell and Nextpower”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hubbell	$6.22 billion	4.04	$887.10 million	$16.89	28.17
Nextpower	$3.63 billion	3.52	$585.88 million	$3.86	21.84

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

Institutional & Insider Ownership

88.2% of Hubbell shares are owned by institutional investors. Comparatively, 67.4% of Nextpower shares are owned by institutional investors. 0.6% of Hubbell shares are owned by insiders. Comparatively, 0.8% of Nextpower shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Hubbell has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Nextpower has a beta of 1.94, suggesting that its share price is 94% more volatile than the S&P 500.

About Hubbell

Hubbell Incorporated, together with its subsidiaries, designs, manufactures, and sells electrical and utility solutions in the United States and internationally. It operates through two segments, Electrical Solutions and Utility Solutions. The Electrical Solution segment offers standard and special application wiring device products, rough-in electrical products, connector and grounding products, lighting fixtures, 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. It also designs and manufactures various 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; and special application products primarily through wholesale distributors to contractors, industrial customers, and original equipment manufacturers. The Utility Solution segment designs, manufactures, and sells electrical distribution, transmission, substation, and telecommunications products, such as arresters, insulators, connectors, anchors, bushings, and enclosures cutoffs and switches; and utility infrastructure products, including smart meters, communications systems, and protection and control devices. This segment sells its products to distributors. Its brand portfolio includes Hubbell, Kellems, Bryant, Burndy, CMC, Bell, TayMac, Wiegmann, Killark, Hawke, Aclara, Fargo, Quazite, Hot Box, etc. The company was founded in 1888 and is headquartered in Shelton, Connecticut.

About Nextpower

Nextpower, formerly known as Nextracker, an energy solutions company, provides solar trackers and software solutions for utility-scale and distributed generation solar projects in the United States and internationally. The company offers tracking solutions, which includes NX Horizon, a solar tracking solution; and NX Horizon-XTR, a terrain-following tracker designed to expand the addressable market for trackers on sites with sloped, uneven, and challenging terrain. It also provides TrueCapture, a self-adjusting tracker control system, which boosts solar power plant production by optimizing the position of individual tracker row in response to site features, such as varying topography and changing weather conditions; and NX Navigator, that assists solar power plant owners and operators in monitoring, controlling, and protecting their solar projects. The company was founded in 2013 and is headquartered in Fremont, California. As of March 31, 2024 Nextracker Inc. (Nextpower) was formerly a subsidiary of Flex Ltd.