Hubbell is a leading global provider of electrical and utility solutions. The company is well-positioned to capitalize on thetrend of grid modernization. As aging infrastructure demands upgrades, Hubbell’s advanced technologies and solutions offer improvements in efficiency, reliability, and sustainability.

The company’s broad portfolio aligns with investments being made by governments, utility operators, and corporations in modernizing power grids. We believe these trends will support consistent growth for Hubbell over a long time horizon.

Source: Hubbell Incorporated

Hubbell’s business is organized in two segments: Utility Solutions (HUS) at roughly two thirds of revenue, and Electrical Solutions (HES) the remaining third.

Utility Solutions (HUS): The HUS segment is selling effectively all of the components you see on an electrical tower other than the tower itself, the transformer, and the wire. The remaining components are arresters, insulators, various connectors, bushings, and other accessories. Additionally, Hubbell sells much of what you would see at a substation – enclosures, controls, meters, etc. Roughly half of this segment is maintenance or replacement driven.

Source: Hubbell Incorporated

Electrical Solutions (HES): Hubbell’s Electrical Solutions segment focuses on providing a wide range of electrical products and systems designed for industrial, and commercial markets. This segment offers solutions such as wiring & grounding devices, components for power management & control, among other related products. The portfolio is aimed at enhancing energy efficiency, safety, and connectivity. Within this segment, the company has built a meaningful presence in the faster growing areas of data centers and renewable energy.

Source: Hubbell Incorporated

Hubbell has a long-standing history operating in the Utility sector with leading brands. Utility customers are risk-averse and unlikely to change from one branded component to another. In many of their businesses, Hubbell is one of two or three players at scale. The breadth of their portfolio and distribution network makes them an easy “one-stop-shop” for their customers.

We opened at a 3.5% position in Hubbell. We believe this is appropriate given its potential as a core compounder in the middle of the portfolio.

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