Critical Analysis: MTS Systems Corporation (MTSC) vs. Hubbell (HUBB)
MTS Systems Corporation (NASDAQ: MTSC) and Hubbell (NYSE:HUBB) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.
Risk and Volatility
MTS Systems Corporation has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Hubbell has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for MTS Systems Corporation and Hubbell, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MTS Systems Corporation||0||1||2||0||2.67|
MTS Systems Corporation presently has a consensus price target of $58.00, indicating a potential upside of 6.32%. Hubbell has a consensus price target of $122.00, indicating a potential upside of 4.08%. Given MTS Systems Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe MTS Systems Corporation is more favorable than Hubbell.
MTS Systems Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. Hubbell pays an annual dividend of $2.80 per share and has a dividend yield of 2.4%. MTS Systems Corporation pays out 91.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hubbell pays out 53.0% of its earnings in the form of a dividend. Hubbell is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares MTS Systems Corporation and Hubbell’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MTS Systems Corporation||3.13%||12.49%||4.31%|
Insider and Institutional Ownership
85.2% of Hubbell shares are held by institutional investors. 1.8% of MTS Systems Corporation shares are held by insiders. Comparatively, 1.3% of Hubbell shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares MTS Systems Corporation and Hubbell’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MTS Systems Corporation||$801.32 million||1.15||$113.92 million||$1.31||41.64|
|Hubbell||$3.56 billion||1.80||$606.70 million||$5.28||22.20|
Hubbell has higher revenue and earnings than MTS Systems Corporation. Hubbell is trading at a lower price-to-earnings ratio than MTS Systems Corporation, indicating that it is currently the more affordable of the two stocks.
Hubbell beats MTS Systems Corporation on 11 of the 16 factors compared between the two stocks.
MTS Systems Corporation Company Profile
MTS Systems Corporation is a supplier of test systems and position sensors. The Company operates through two segments: Test and Sensors. The Test segment provides testing solutions, including hardware, software and services to ground vehicles, materials and structures markets. The Sensors segment provides position sensors for a range of industrial and mobile hydraulic applications. The Sensors segment products are used by industrial machinery and mobile equipment manufacturers to automate the operation of their products for safety and end-user productivity. The Sensors segment manufactures products utilizing magnetostriction technology. Its technology, Temposonics, offers non-contact position sensing. Its Temposonics sensors provide position feedback for motion control systems. It also provides various service offerings, including calibration, maintenance, training and consulting. The Company has its manufacturing facilities in North America, Europe and Asia.
Hubbell Company Profile
Hubbell Incorporated is engaged in the design, manufacture and sale of electrical and electronic products for a range of non-residential and residential construction, industrial and utility applications. The Company’s segments include Electrical and the Power. The Electrical segment consists of businesses that sell stock and custom products, including standard and special application wiring device products, rough-in electrical products, lighting fixtures and controls, components and assemblies for the natural gas distribution market, as well as other electrical equipment. In addition, certain businesses design and manufacture a range of high voltage test and measurement equipment, industrial controls and communication systems used in the non-residential and industrial markets. The Power segment consists of operations that design and manufacture various distribution, transmission, substation and telecommunications products primarily used by the electrical utility industry.
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