HYDRO ONE LTD (H.CA) Stock Fundamental Analysis
TSX:H - Toronto Stock Exchange - CA4488112083 - Common Stock - Currency: CAD
We assign a fundamental rating of 4 out of 10 to H. 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. While showing a medium growth rate, H is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year H was profitable.
H had a positive operating cash flow in the past year.
H had positive earnings in each of the past 5 years.
In the past 5 years H always reported a positive cash flow from operatings.
1.2 Ratios
H has a Return On Assets of 3.29%. This is amongst the best in the industry. H outperforms 94.74% of its industry peers.
Looking at the Return On Equity, with a value of 9.96%, H belongs to the top of the industry, outperforming 94.74% of the companies in the same industry.
With an excellent Return On Invested Capital value of 5.28%, H belongs to the best 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 has a Profit Margin (13.99%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of H has grown nicely.
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.
The Gross Margin of H (51.10%) is comparable to the rest of the industry.
H's Gross Margin has been stable in the last couple of years.
| 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.
H has more shares outstanding than it did 5 years ago.
The debt/assets ratio for H is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.29, we must say that H is in the distress zone and has some risk of bankruptcy.
H has a Altman-Z score of 1.29. This is amongst the best in the industry. H outperforms 100.00% of its industry peers.
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 belongs to the top of the industry, outperforming 94.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.34 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.29 |
ROIC/WACC0.66
WACC7.95%
2.3 Liquidity
H has a Current Ratio of 0.41. This is a bad value and indicates that H is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.41, H is doing worse than 94.74% of the companies in the same industry.
A Quick Ratio of 0.40 indicates that H may have some problems paying its short term obligations.
H has a Quick ratio of 0.40. This is amonst the worse of the industry: H underperforms 94.74% of its industry peers.
| 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.
H shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.95%.
H shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.54% yearly.
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 Year5.79%
Revenue Next 2Y4.49%
Revenue Next 3Y3.73%
Revenue Next 5Y3.85%
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
The Price/Earnings ratio is 23.83, which indicates a rather expensive current valuation of H.
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 26.69. H is around the same levels.
H is valuated rather expensively with a Price/Forward Earnings ratio of 21.86.
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.
H's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.83 | ||
| Fwd PE | 21.86 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, H is valued more expensive than 94.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.39 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of H may justify a higher PE ratio.
PEG (NY)2.89
PEG (5Y)5.01
EPS Next 2Y7.35%
EPS Next 3Y7.06%
5. Dividend
5.1 Amount
H has a Yearly Dividend Yield of 2.74%. Purely for dividend investing, there may be better candidates out there.
With a Dividend Yield of 2.74, H pays less dividend than the industry average, which is at 6.66. 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 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
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
5.3 Sustainability
H pays out 61.67% of its income as dividend. This is not a sustainable payout ratio.
H's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP61.67%
EPS Next 2Y7.35%
EPS Next 3Y7.06%
TSX:H (6/25/2025, 7:00:00 PM)
48.61
-0.36 (-0.74%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)
Earnings (Next)
Inst Owners21.05%
Inst Owner ChangeN/A
Ins Owners0.02%
Ins Owner ChangeN/A
Market Cap29.15B
Analysts52.22
Price Target50.73 (4.36%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
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)5.21%
PT rev (3m)9.4%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.97%
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)-0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.83 | ||
| Fwd PE | 21.86 | ||
| P/S | 3.34 | ||
| P/FCF | N/A | ||
| P/OCF | 11.29 | ||
| P/B | 2.38 | ||
| P/tB | 2.6 | ||
| EV/EBITDA | 15.39 |
EPS(TTM)2.04
EY4.2%
EPS(NY)2.22
Fwd EY4.58%
FCF(TTM)-0.34
FCFYN/A
OCF(TTM)4.3
OCFY8.86%
SpS14.55
BVpS20.44
TBVpS18.71
PEG (NY)2.89
PEG (5Y)5.01
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 | 1.29 |
F-Score6
WACC7.95%
ROIC/WACC0.66
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 Year5.79%
Revenue Next 2Y4.49%
Revenue Next 3Y3.73%
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%