HUBG WACC - Weighted Average Cost of Capital
The WACC of Hub Group Inc (HUBG) is 7.5%.
| Range | Selected | |
| Cost of equity | 6.4% - 9.7% | 8.05% |
| Tax rate | 22.7% - 23.6% | 23.15% |
| Cost of debt | 4.0% - 4.6% | 4.3% |
| WACC | 6.1% - 9.0% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.56 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 9.7% |
| Tax rate | 22.7% | 23.6% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 4.0% | 4.6% |
| After-tax WACC | 6.1% | 9.0% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HUBG | Hub Group Inc | 0.12 | 1.1 | 1 |
| AAWW | Atlas Air Worldwide Holdings Inc | 0.78 | 1.14 | 0.72 |
| AIRT | Air T Inc | 1.96 | 0 | 0 |
| ATSG | Air Transport Services Group Inc | 1.05 | 0.94 | 0.52 |
| CJT.TO | Cargojet Inc | 0.44 | 1.73 | 1.29 |
| ECHO | Echo Global Logistics Inc | 0.11 | 0.79 | 0.73 |
| PACC | Pacific CMA Inc | 1.07 | 0.35 | 0.19 |
| RLGT | Radiant Logistics Inc | 0 | 1 | 0.99 |
| JETPAK.ST | Jetpak Top Holding AB (publ) | 0.16 | -0.11 | -0.1 |
| MLL.DE | Mueller Die lila Logistik SE | 3.25 | 0.04 | 0.01 |
| Low | High | |
| Unlevered beta | 0.39 | 0.72 |
| Relevered beta | 0.34 | 0.79 |
| Adjusted relevered beta | 0.56 | 0.86 |
HUBG's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for HUBG:
cost_of_equity (8.05%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.56) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.