Hubbell Inc (HUBB)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.29 | 0.27 | 0.27 | 0.28 | 0.31 |
| Debt-to-capital ratio | 0.41 | 0.38 | 0.39 | 0.41 | 0.44 |
| Debt-to-equity ratio | 0.70 | 0.61 | 0.64 | 0.69 | 0.77 |
| Financial leverage ratio | 2.40 | 2.29 | 2.37 | 2.46 | 2.52 |
Hubbell Inc. has shown consistency in maintaining its solvency ratios over the past five years. The debt-to-assets ratio has ranged from 0.27 to 0.32, indicating that about 27% to 32% of the company's assets have been financed by debt during this period. This suggests a relatively stable level of leverage in funding its operations.
The debt-to-capital ratio has also remained steady, ranging from 0.38 to 0.45. This ratio signifies the proportion of the company's capital that is funded through debt, showing relatively consistent levels of debt in relation to total capital over the years.
The debt-to-equity ratio, which measures the extent to which the company is financed by debt relative to equity, has been maintained between 0.61 and 0.81. Hubbell Inc. has generally sustained a moderate level of debt in comparison to equity, indicating a balanced capital structure.
The financial leverage ratio, reflecting the company's use of debt to support its assets, has fluctuated between 2.29 and 2.52. This implies that the company has maintained a stable level of financial leverage in its capital structure over the years.
In summary, Hubbell Inc. has managed its solvency ratios effectively, with consistent levels of debt financing relative to assets, capital, equity, and overall financial leverage across the years analyzed. This stability suggests that the company has maintained a prudent approach to managing its debt and capital structure to support its operations and growth initiatives.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 28.30 | 14.30 | 9.73 | 8.31 | 8.23 |
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations from its operating earnings. A higher interest coverage ratio signifies a stronger ability to cover interest payments and suggests lower financial risk for the company.
In the case of Hubbell Inc., the interest coverage ratio has shown a positive trend over the past five years. The ratio has increased from 8.60 in 2019 to 28.30 in 2023, indicating a significant improvement in the company's ability to cover interest expenses. This substantial increase implies that Hubbell's operating earnings have more than covered its interest payments, reflecting a healthier financial position.
The consistent increase in the interest coverage ratio demonstrates Hubbell's effective management of its debt obligations and improved financial stability over the years. This trend is favorable from an investor's perspective as it suggests reduced default risk and enhanced creditor confidence in the company's ability to service its debt.
Overall, the strong interest coverage ratios observed for Hubbell Inc. indicate a sound financial health and efficient utilization of its operating earnings to meet interest expenses, portraying a positive outlook for the company's debt servicing capabilities.