Core Insights - Major U.S. stock market indices experienced a decline on February 12, 2026, due to concerns regarding AI disruption affecting various sectors, including real estate, transportation, and software [1] - A shift towards steady dividend-growth stocks is recommended for equity investors as they provide resilience and cash flow durability during a period of reevaluation of traditional growth narratives [2] Dividend Growth Stocks - Stocks with a strong history of year-over-year dividend growth are considered healthier for capital appreciation compared to simple dividend-paying stocks or those with high yields [3] - Five selected dividend growth stocks include Agnico Eagle Mines (AEM), Advanced Drainage Systems (WMS), Amphenol (APH), Tapestry (TPR), and TIM S.A. (TIMB), which are viewed as solid portfolio choices [3] Advantages of Dividend Growth - Companies with a strong history of dividend growth are typically mature and less vulnerable to market volatility, providing a hedge against economic and political uncertainties [4] - These stocks exhibit strong fundamentals, including sustainable business models, profitability, rising cash flows, solid liquidity, strong balance sheets, and attractive valuations [5] Performance Metrics - Dividend-growth stocks have historically outperformed the broader market and other dividend-paying stocks, making them a favorable investment strategy [6] - Criteria for selection include positive historical dividend, sales, and earnings growth, as well as projected earnings growth rates [7] Stock Highlights - Agnico Eagle Mines (AEM) projects a 28% revenue growth for 2026 and has a long-term EPS growth rate of 33.8%, with a dividend yield of 0.74% [9][11] - Advanced Drainage Systems (WMS) anticipates a 4% revenue growth for fiscal 2026, with a long-term earnings growth rate of 13.90% and a dividend yield of 0.42% [12] - Amphenol (APH) expects a 34.9% revenue growth for 2026, with a long-term earnings growth rate of 21.90% and a dividend yield of 0.69% [13] - Tapestry (TPR) forecasts a 9.6% revenue growth for fiscal 2026, with a long-term earnings growth rate of 12.9% and a dividend yield of 1.03% [14] - TIM S.A. (TIMB) projects a 10.3% revenue growth for 2026, with a long-term earnings growth rate of 18.7% and a dividend yield of 5.20% [15]

Financial Data and Key Metrics Changes - Hubbell reported a 12% total sales growth in Q4 2025, with adjusted operating profit growth of 19% and adjusted earnings per share growth of 15% [5][10] - Organic growth for the fourth quarter was 9%, driven by strong performance in the Electrical Solutions segment and grid infrastructure businesses [5][10] - The company achieved a free cash flow margin of 15% and a return on invested capital of 19% for 2025, indicating strong business model quality [9] Business Line Data and Key Metrics Changes - **Electrical Solutions Segment**: Achieved 7% organic growth and 14% adjusted operating profit growth for the full year 2025, with adjusted operating margins exceeding 20% for the first time [7][8] - **Utility Solutions Segment**: Generated net sales of $936 million in Q4 2025, representing a 10% growth, with grid infrastructure showing strong performance and 12% organic growth [13][15] Market Data and Key Metrics Changes - The utility market remains strong, driven by investments in aging infrastructure and data center build-outs, contributing to robust project activity [5][8] - Grid automation sales declined by 8% in Q4, primarily due to weaker project activity in meters and AMI, although growth in grid protections and controls was noted [15][11] Company Strategy and Development Direction - Hubbell is focused on unifying its Electrical Solutions segment to enhance competitiveness and drive operational efficiencies [7] - The company plans to continue investing in high-return areas and innovative solutions to maintain growth and productivity benefits in 2026 and beyond [9][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong outlook for 2026, anticipating 5%-7% organic growth across the portfolio, particularly in utility T&D and data center markets [20][22] - The company expects to manage price and productivity effectively to offset inflation while continuing to invest in business growth [23] Other Important Information - Hubbell's acquisition of DMC Power is expected to contribute positively to growth and margins, with ongoing investments in automation and production capacity [8][9] - The company is initiating a 2026 outlook for 7%-9% total sales growth and adjusted earnings per share between $19.15 and $19.85 [22] Q&A Session Summary Question: Can you provide more color on orders and their impact on MRO activity? - Management noted strong order momentum, particularly in T&D and data center markets, with visibility into 2026 remaining positive [27][28] Question: What is the outlook for meters and AMI? - The business is stabilizing after working through backlog, with expectations for modest growth moving forward [31][32] Question: How should we think about margin expansion throughout the year? - Management anticipates solid margin expansion, with Q1 expected to be stronger than typical due to easier year-over-year comparisons [39][45] Question: What is the expectation for raw materials prices and cost inflation? - Anticipated mid-single-digit cost inflation for 2026, with ongoing management of price and productivity to address this [54][70] Question: What is the growth outlook for grid infrastructure? - Management expects high single-digit to low double-digit growth in transmission and substation markets, with continued investment in distribution [60][61] Question: How will free cash flow be utilized? - The company plans to deploy free cash flow for high-quality CapEx, M&A opportunities, and share repurchases [63][65]

Core Insights - Amphenol (APH) and TE Connectivity (TEL) are leading global manufacturers of electrical connectors, sensors, and interconnect systems, serving critical markets such as automotive, industrial, aerospace, and communications [1][2] - Both companies are benefiting from long-term trends including vehicle electrification, data-center growth, and the demand for high-speed connectivity [2] Amphenol Overview - Amphenol reported record sales of $6.2 billion in Q3, a 53% increase year-over-year, with 41% organic growth and $6.1 billion in orders [3][4] - The company achieved a record operating margin of 27.5%, with adjusted EPS growing by 86% and free cash flow reaching $1.2 billion [3] - Amphenol's IT datacom business, now 37% of total sales, more than doubled due to strong AI-related demand [4] - Future opportunities include AI growth, defense spending, recovery in commercial aerospace, and electric vehicle transitions, with projected Q4 earnings between $0.89 and $0.91 per share [5][6] TE Connectivity Overview - TE Connectivity reported record Q4 revenues of $4.75 billion, a 17% year-over-year increase, with adjusted EPS rising 25% to $2.44 [7] - The company’s Industrial Solutions segment saw significant growth, with Digital Data Networks increasing by 80% and generating over $900 million in AI-related revenues [8] - TE Connectivity anticipates double-digit growth in Q1 of fiscal 2026, with sales up 17% and adjusted EPS up 23% [10] Comparative Performance - Year-to-date, Amphenol shares have increased by 98.4%, outperforming TE Connectivity's 55.5% increase [12] - Amphenol's shares are trading at a forward Price/Sales ratio of 6.67X, compared to TEL's 3.42X, reflecting its faster revenue and earnings growth [15] - The Zacks Consensus Estimate for Amphenol's 2025 earnings is $3.29 per share, indicating a 74.07% year-over-year increase, while TEL's estimate for fiscal 2026 is $10.56 per share, reflecting a 20.55% increase [18][20] Investment Outlook - Amphenol is positioned as the stronger stock due to its robust revenue and earnings growth, exceptional operating margins, and dominant position in AI-driven datacenter interconnects [21] - TE Connectivity, while steady, faces uneven end-market exposure, making Amphenol a more compelling buy in the current market [21]

Core Viewpoint - The private sector is experiencing job losses, which is beneficial for earnings season and dividend growth stocks due to easing wage pressures and lower inflation, leading to better profit margins and dividend hikes [2]. Dividend Growth Stocks Dividend Growth Stock 1: T-Mobile US (TMUS) - T-Mobile US initiated a new dividend program in 2023 and raised its dividend by 35% to 88 cents per share after merging with Sprint [6][8]. - The company is expanding its margins and free cash flow, which supports its dividend growth strategy [7][9]. Dividend Growth Stock 2: Amphenol (APH) - Amphenol has seen significant growth, particularly in AI-related applications, with total orders increasing by nearly 60% year-over-year in Q1 2025 [12]. - The company raised its dividend by 50% last year, marking one of its largest increases [12]. Dividend Growth Stock 3: California Resources (CRC) - California Resources has shifted towards green-energy initiatives and has increased its quarterly distribution by 128% since its initiation [15]. - The company has been profitable since emerging from bankruptcy in 2021 and has seen its shares triple since relisting [16]. Dividend Growth Stock 4: RLJ Lodging Trust (RLJ) - RLJ Lodging Trust reduced its dividend significantly during the pandemic but has since increased it by 1,400% from its low point [19]. - Analysts project a 40% AFFO payout ratio for RLJ, indicating potential for further dividend growth [20]. Dividend Growth Stock 5: Coca-Cola Consolidated (COKE) - Coca-Cola Consolidated has shown consistent top-line growth and recently announced a $16-per-share special dividend, along with a quintupled regular payout to $2.50 per share [24]. - The company currently pays out only 15% of its earnings as dividends, suggesting room for future increases [24].