HYDRO ONE LTD (H.CA) Stock Fundamental Analysis
TSX:H - Toronto Stock Exchange - CA4488112083 - Common Stock - Currency: CAD
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. H has an excellent profitability rating, but there are concerns on its financial health. H is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
H had positive earnings in the past year.
H had a positive operating cash flow in the past year.
Each year in the past 5 years H has been profitable.
In the past 5 years H always reported a positive cash flow from operatings.
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.
H has a Return On Equity of 9.96%. This is amongst the best in the industry. H outperforms 94.74% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.28%, H belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
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 Rank | Sector 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%
1.3 Margins
H's Profit Margin of 13.99% is amongst the best of the industry. H outperforms 94.74% of its industry peers.
H's Profit Margin has improved in the last couple of years.
H has a Operating Margin (23.66%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of H has grown nicely.
H has a Gross Margin (51.10%) which is in line with its industry peers.
In the last couple of years the Gross Margin of H has remained more or less at the same level.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), H is destroying value.
Compared to 1 year ago, H has about the same amount of shares outstanding.
Compared to 5 years ago, H has more shares outstanding
H has a worse debt/assets ratio than last year.
2.2 Solvency
H has an Altman-Z score of 1.32. This is a bad value and indicates that H is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.32, H belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
A Debt/Equity ratio of 1.34 is on the high side and indicates that H has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.34, H is in line with its industry, outperforming 52.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.34 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.32 |
ROIC/WACC0.85
WACC6.18%
2.3 Liquidity
A Current Ratio of 0.41 indicates that H may have some problems paying its short term obligations.
H has a worse Current ratio (0.41) 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.
With a Quick ratio value of 0.40, H is not doing good in the industry: 94.74% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.41 | ||
| Quick Ratio | 0.4 |
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.
Measured over the past 5 years, H shows a small growth in Earnings Per Share. The EPS has been growing by 4.75% on average per year.
Looking at the last year, H shows a quite strong growth in Revenue. The Revenue has grown by 9.95% in the last year.
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 6.65% on average per year.
Based on estimates for the next years, H will show a small growth in Revenue. The Revenue will grow by 3.74% on average per year.
EPS Next Y8.24%
EPS Next 2Y7.35%
EPS Next 3Y7.06%
EPS Next 5Y6.65%
Revenue Next Year5.79%
Revenue Next 2Y4.49%
Revenue Next 3Y3.73%
Revenue Next 5Y3.74%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.75, the valuation of H can be described as rather expensive.
Based on the Price/Earnings ratio, H is valued expensively inside the industry as 94.74% of the companies are valued cheaper.
The average S&P500 Price/Earnings ratio is at 26.20. H is around the same levels.
With a Price/Forward Earnings ratio of 22.71, H is valued on the expensive side.
Based on the Price/Forward Earnings ratio, H is valued expensively inside the industry as 94.74% of the companies are valued cheaper.
The average S&P500 Price/Forward Earnings ratio is at 22.13. H is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.75 | ||
| Fwd PE | 22.71 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, H is valued expensively inside the industry as 94.74% of the companies are valued cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.77 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates H does not grow enough to justify the current Price/Earnings ratio.
H has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.01
PEG (5Y)5.21
EPS Next 2Y7.35%
EPS Next 3Y7.06%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.47%, H has a reasonable but not impressive dividend return.
With a Dividend Yield of 2.47, H pays less dividend than the industry average, which is at 4.19. 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 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.47% |
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.
H has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)4.69%
Div Incr Years7
Div Non Decr Years7
5.3 Sustainability
61.67% of the earnings are spent on dividend by H. 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%
TSX:H (5/28/2025, 7:00:00 PM)
50.5
-0.56 (-1.1%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners21.85%
Inst Owner ChangeN/A
Ins Owners0.02%
Ins Owner ChangeN/A
Market Cap30.29B
Analysts51.76
Price Target48.21 (-4.53%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.47% |
Yearly Dividend1.24
Dividend Growth(5Y)4.69%
DP61.67%
Div Incr Years7
Div Non Decr Years7
Ex-Date
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)3.23%
PT rev (3m)5.24%
EPS NQ rev (1m)0.18%
EPS NQ rev (3m)9.27%
EPS NY rev (1m)0%
EPS NY rev (3m)0.57%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.75 | ||
| Fwd PE | 22.71 | ||
| P/S | 3.47 | ||
| P/FCF | N/A | ||
| P/OCF | 11.73 | ||
| P/B | 2.47 | ||
| P/tB | 2.7 | ||
| EV/EBITDA | 15.77 |
EPS(TTM)2.04
EY4.04%
EPS(NY)2.22
Fwd EY4.4%
FCF(TTM)-0.34
FCFYN/A
OCF(TTM)4.3
OCFY8.52%
SpS14.55
BVpS20.44
TBVpS18.71
PEG (NY)3.01
PEG (5Y)5.21
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 1.32 |
F-Score6
WACC6.18%
ROIC/WACC0.85
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 5Y6.65%
Revenue 1Y (TTM)9.95%
Revenue growth 3Y5.5%
Revenue growth 5Y5.54%
Sales Q2Q%11.17%
Revenue Next Year5.79%
Revenue Next 2Y4.49%
Revenue Next 3Y3.73%
Revenue Next 5Y3.74%
EBIT growth 1Y11.5%
EBIT growth 3Y6.86%
EBIT growth 5Y8.47%
EBIT Next Year65.53%
EBIT Next 3Y23.56%
EBIT Next 5Y15.94%
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%