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HYDRO ONE LTD (H.CA) Stock Fundamental Analysis

TSX:H - Toronto Stock Exchange - CA4488112083 - Common Stock - Currency: CAD

49.66  +0.66 (+1.35%)

Fundamental Rating

4

Taking everything into account, H scores 4 out of 10 in our fundamental rating. H was compared to 19 industry peers in the Electric Utilities industry. While H belongs to the best of the industry regarding profitability, there are concerns on its financial health. H is valied quite expensively at the moment, while it does show a decent growth rate.


Dividend Valuation Growth Profitability Health

7

1. Profitability

1.1 Basic Checks

In the past year H was profitable.
In the past year H had a positive cash flow from operations.
In the past 5 years H has always been profitable.
Each year in the past 5 years H had a positive operating cash flow.
H.CA Yearly Net Income VS EBIT VS OCF VS FCFH.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 1B -1B 2B -2B

1.2 Ratios

H's Return On Assets of 3.29% is amongst the best of the industry. H outperforms 94.74% of its industry peers.
With an excellent Return On Equity value of 9.96%, H belongs to the best of the industry, outperforming 94.74% of the companies in the same industry.
H has a better Return On Invested Capital (5.28%) than 100.00% of its industry peers.
H had an Average Return On Invested Capital over the past 3 years of 5.28%. This is in line with the industry average of 3.84%.
Industry RankSector Rank
ROA 3.29%
ROE 9.96%
ROIC 5.28%
ROA(3y)3.26%
ROA(5y)3.76%
ROE(3y)9.38%
ROE(5y)10.76%
ROIC(3y)5.28%
ROIC(5y)5.06%
H.CA Yearly ROA, ROE, ROICH.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 5 10 15

1.3 Margins

H has a Profit Margin (13.99%) which is in line with its industry peers.
H's Profit Margin has improved in the last couple of years.
The Operating Margin of H (23.66%) is comparable to the rest of the industry.
H's Operating Margin has improved in the last couple of years.
H has a Gross Margin of 51.10%. This is comparable to the rest of the industry: H outperforms 57.89% of its industry peers.
H's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 23.66%
PM (TTM) 13.99%
GM 51.1%
OM growth 3Y1.29%
OM growth 5Y2.78%
PM growth 3Y0.67%
PM growth 5Y2.56%
GM growth 3Y0.46%
GM growth 5Y-0.32%
H.CA Yearly Profit, Operating, Gross MarginsH.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10 20 30 40 50

2

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so H is destroying value.
The number of shares outstanding for H remains at a similar level compared to 1 year ago.
The number of shares outstanding for H has been increased compared to 5 years ago.
The debt/assets ratio for H is higher compared to a year ago.
H.CA Yearly Shares OutstandingH.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M 500M
H.CA Yearly Total Debt VS Total AssetsH.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B

2.2 Solvency

Based on the Altman-Z score of 1.31, we must say that H is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.31, H belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
H has a Debt/Equity ratio of 1.34. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of H (1.34) is better than 94.74% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.34
Debt/FCF N/A
Altman-Z 1.31
ROIC/WACC0.84
WACC6.29%
H.CA Yearly LT Debt VS Equity VS FCFH.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 5B 10B 15B

2.3 Liquidity

A Current Ratio of 0.41 indicates that H may have some problems paying its short term obligations.
The Current ratio of H (0.41) is worse than 94.74% of its industry peers.
A Quick Ratio of 0.40 indicates that H may have some problems paying its short term obligations.
H has a worse Quick ratio (0.40) than 94.74% of its industry peers.
Industry RankSector Rank
Current Ratio 0.41
Quick Ratio 0.4
H.CA Yearly Current Assets VS Current LiabilitesH.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B

4

3. Growth

3.1 Past

H shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.09%, which is quite good.
H shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.75% yearly.
H shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.95%.
The Revenue has been growing slightly by 5.54% on average over the past years.
EPS 1Y (TTM)12.09%
EPS 3Y6.23%
EPS 5Y4.75%
EPS Q2Q%22.45%
Revenue 1Y (TTM)9.95%
Revenue growth 3Y5.5%
Revenue growth 5Y5.54%
Sales Q2Q%11.17%

3.2 Future

Based on estimates for the next years, H will show a small growth in Earnings Per Share. The EPS will grow by 6.66% on average per year.
Based on estimates for the next years, H will show a small growth in Revenue. The Revenue will grow by 3.85% on average per year.
EPS Next Y8.24%
EPS Next 2Y7.35%
EPS Next 3Y7.06%
EPS Next 5Y6.66%
Revenue Next Year7.13%
Revenue Next 2Y5.16%
Revenue Next 3Y4.15%
Revenue Next 5Y3.85%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
H.CA Yearly Revenue VS EstimatesH.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2B 4B 6B 8B 10B
H.CA Yearly EPS VS EstimatesH.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 0.5 1 1.5 2 2.5

1

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 24.34, which indicates a rather expensive current valuation of H.
94.74% of the companies in the same industry are cheaper than H, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.82, H is valued at the same level.
The Price/Forward Earnings ratio is 22.33, which indicates a rather expensive current valuation of H.
H's Price/Forward Earnings ratio is rather expensive when compared to the industry. H is more expensive than 94.74% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.21. H is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 24.34
Fwd PE 22.33
H.CA Price Earnings VS Forward Price EarningsH.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

94.74% of the companies in the same industry are cheaper than H, based on the Enterprise Value to EBITDA ratio.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 15.6
H.CA Per share dataH.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 10 15 20

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
H has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.96
PEG (5Y)5.12
EPS Next 2Y7.35%
EPS Next 3Y7.06%

5

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.72%, H has a reasonable but not impressive dividend return.
With a Dividend Yield of 2.72, H pays less dividend than the industry average, which is at 5.35. 94.74% of the companies listed in the same industry pay a better dividend than H!
H's Dividend Yield is comparable with the S&P500 average which is at 2.39.
Industry RankSector Rank
Dividend Yield 2.72%

5.2 History

The dividend of H has a limited annual growth rate of 4.69%.
H has been paying a dividend for at least 10 years, so it has a reliable track record.
As H did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)4.69%
Div Incr Years7
Div Non Decr Years7
H.CA Yearly Dividends per shareH.CA Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.2 0.4 0.6 0.8 1

5.3 Sustainability

H pays out 61.67% of its income as dividend. This is not a sustainable payout ratio.
The dividend of H is growing, but earnings are growing more, so the dividend growth is sustainable.
DP61.67%
EPS Next 2Y7.35%
EPS Next 3Y7.06%
H.CA Yearly Income VS Free CF VS DividendH.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 1B -1B -2B
H.CA Dividend Payout.H.CA Dividend Payout, showing the Payout Ratio.H.CA Dividend Payout.PayoutRetained Earnings

HYDRO ONE LTD

TSX:H (8/1/2025, 7:00:00 PM)

49.66

+0.66 (+1.35%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)05-08 2025-05-08/bmo
Earnings (Next)08-13 2025-08-13
Inst Owners21.05%
Inst Owner ChangeN/A
Ins Owners0.02%
Ins Owner ChangeN/A
Market Cap29.79B
Analysts52.63
Price Target50.89 (2.48%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 2.72%
Yearly Dividend1.24
Dividend Growth(5Y)4.69%
DP61.67%
Div Incr Years7
Div Non Decr Years7
Ex-Date06-11 2025-06-11 (0.3331)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.3%
Min EPS beat(2)3.99%
Max EPS beat(2)8.61%
EPS beat(4)3
Avg EPS beat(4)3.76%
Min EPS beat(4)-0.44%
Max EPS beat(4)8.61%
EPS beat(8)6
Avg EPS beat(8)2.57%
EPS beat(12)9
Avg EPS beat(12)2.07%
EPS beat(16)12
Avg EPS beat(16)2.61%
Revenue beat(2)1
Avg Revenue beat(2)2.96%
Min Revenue beat(2)-4.1%
Max Revenue beat(2)10.03%
Revenue beat(4)3
Avg Revenue beat(4)3.96%
Min Revenue beat(4)-4.1%
Max Revenue beat(4)10.03%
Revenue beat(8)5
Avg Revenue beat(8)0.31%
Revenue beat(12)6
Avg Revenue beat(12)-2.86%
Revenue beat(16)6
Avg Revenue beat(16)-3.32%
PT rev (1m)0.33%
PT rev (3m)7.59%
EPS NQ rev (1m)1.48%
EPS NQ rev (3m)0.88%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)1.27%
Revenue NY rev (3m)1.27%
Valuation
Industry RankSector Rank
PE 24.34
Fwd PE 22.33
P/S 3.41
P/FCF N/A
P/OCF 11.54
P/B 2.43
P/tB 2.65
EV/EBITDA 15.6
EPS(TTM)2.04
EY4.11%
EPS(NY)2.22
Fwd EY4.48%
FCF(TTM)-0.34
FCFYN/A
OCF(TTM)4.3
OCFY8.67%
SpS14.55
BVpS20.44
TBVpS18.71
PEG (NY)2.96
PEG (5Y)5.12
Profitability
Industry RankSector Rank
ROA 3.29%
ROE 9.96%
ROCE 6.24%
ROIC 5.28%
ROICexc 5.3%
ROICexgc 5.46%
OM 23.66%
PM (TTM) 13.99%
GM 51.1%
FCFM N/A
ROA(3y)3.26%
ROA(5y)3.76%
ROE(3y)9.38%
ROE(5y)10.76%
ROIC(3y)5.28%
ROIC(5y)5.06%
ROICexc(3y)5.36%
ROICexc(5y)5.15%
ROICexgc(3y)5.54%
ROICexgc(5y)5.32%
ROCE(3y)6.26%
ROCE(5y)6.02%
ROICexcg growth 3Y1.33%
ROICexcg growth 5Y2.9%
ROICexc growth 3Y1.4%
ROICexc growth 5Y2.89%
OM growth 3Y1.29%
OM growth 5Y2.78%
PM growth 3Y0.67%
PM growth 5Y2.56%
GM growth 3Y0.46%
GM growth 5Y-0.32%
F-Score6
Asset Turnover0.24
Health
Industry RankSector Rank
Debt/Equity 1.34
Debt/FCF N/A
Debt/EBITDA 5.5
Cap/Depr 299.03%
Cap/Sales 31.9%
Interest Coverage 3
Cash Conversion 86.18%
Profit Quality N/A
Current Ratio 0.41
Quick Ratio 0.4
Altman-Z 1.31
F-Score6
WACC6.29%
ROIC/WACC0.84
Cap/Depr(3y)280.72%
Cap/Depr(5y)266.35%
Cap/Sales(3y)30.49%
Cap/Sales(5y)29.09%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.09%
EPS 3Y6.23%
EPS 5Y4.75%
EPS Q2Q%22.45%
EPS Next Y8.24%
EPS Next 2Y7.35%
EPS Next 3Y7.06%
EPS Next 5Y6.66%
Revenue 1Y (TTM)9.95%
Revenue growth 3Y5.5%
Revenue growth 5Y5.54%
Sales Q2Q%11.17%
Revenue Next Year7.13%
Revenue Next 2Y5.16%
Revenue Next 3Y4.15%
Revenue Next 5Y3.85%
EBIT growth 1Y11.5%
EBIT growth 3Y6.86%
EBIT growth 5Y8.47%
EBIT Next Year65.53%
EBIT Next 3Y23.56%
EBIT Next 5Y16.06%
FCF growth 1Y-645.95%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y19.15%
OCF growth 3Y5.65%
OCF growth 5Y9.44%