HYDRO ONE LTD (H.CA) Stock Fundamental Analysis
TSX:H - Toronto Stock Exchange - CA4488112083 - Common Stock - Currency: CAD
H gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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. 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.
H had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.15%, H belongs to the top of the industry, outperforming 94.74% of the companies in the same industry.
The Return On Equity of H (9.56%) is better than 94.74% of its industry peers.
H has a Return On Invested Capital of 5.08%. This is amongst the best in the industry. H outperforms 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for H is in line with the industry average of 3.62%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.15% | ||
| ROE | 9.56% | ||
| ROIC | 5.08% |
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 13.63% is in line compared to the rest of the industry. H outperforms 52.63% of its industry peers.
In the last couple of years the Profit Margin of H has grown nicely.
With a Operating Margin value of 23.18%, H perfoms like the industry average, outperforming 57.89% of the companies in the same industry.
H's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 51.17%, H is in line with its industry, outperforming 57.89% of the companies in the same industry.
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 | 23.18% | ||
| PM (TTM) | 13.63% | ||
| GM | 51.17% |
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
H has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
H has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, H has more shares outstanding
Compared to 1 year ago, H has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.30, we must say that H is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of H (1.30) is better than 100.00% of its industry peers.
A Debt/Equity ratio of 1.37 is on the high side and indicates that H has dependencies on debt financing.
With a Debt to Equity ratio value of 1.37, H perfoms like the industry average, outperforming 52.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.37 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.3 |
ROIC/WACC0.82
WACC6.22%
2.3 Liquidity
H has a Current Ratio of 0.60. This is a bad value and indicates that H is not financially healthy enough and could expect problems in meeting its short term obligations.
H has a worse Current ratio (0.60) than 94.74% of its industry peers.
H has a Quick Ratio of 0.60. This is a bad value and indicates that H is not financially healthy enough and could expect problems in meeting its short term obligations.
H has a Quick ratio of 0.60. This is amongst the best in the industry. H outperforms 94.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.6 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.54% over the past year.
Measured over the past years, H shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.16% on average per year.
The Revenue has grown by 8.16% in the past year. This is quite good.
The Revenue has been growing slightly by 5.54% on average over the past years.
EPS 1Y (TTM)6.54%
EPS 3Y6.19%
EPS 5Y8.16%
EPS Q2Q%10.45%
Revenue 1Y (TTM)8.16%
Revenue growth 3Y5.5%
Revenue growth 5Y5.54%
Sales Q2Q%5.86%
3.2 Future
The Earnings Per Share is expected to grow by 6.36% on average over the next years.
Based on estimates for the next years, H will show a small growth in Revenue. The Revenue will grow by 4.20% on average per year.
EPS Next Y6.84%
EPS Next 2Y6.8%
EPS Next 3Y7.7%
EPS Next 5Y6.36%
Revenue Next Year6.65%
Revenue Next 2Y5.2%
Revenue Next 3Y4.33%
Revenue Next 5Y4.2%
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 decreasing.
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 24.63, the valuation of H can be described as rather expensive.
89.47% of the companies in the same industry are cheaper than H, based on the Price/Earnings ratio.
H is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 29.35, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 22.77, the valuation of H can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of H indicates a rather expensive valuation: H more expensive than 94.74% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.10. H is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.63 | ||
| Fwd PE | 22.77 |
4.2 Price Multiples
H's Enterprise Value to EBITDA ratio is rather expensive when compared to the industry. H is more expensive than 94.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.63 |
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)3.6
PEG (5Y)3.02
EPS Next 2Y6.8%
EPS Next 3Y7.7%
5. Dividend
5.1 Amount
H has a Yearly Dividend Yield of 2.70%.
Compared to an average industry Dividend Yield of 4.45, H's dividend is way lower than its industry peers. On top of this 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 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.7% |
5.2 History
The dividend of H has a limited annual growth rate of 4.69%.
H has paid a dividend for at least 10 years, which is 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
64.27% 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.
DP64.27%
EPS Next 2Y6.8%
EPS Next 3Y7.7%
TSX:H (3/7/2025, 7:00:00 PM)
47.29
+0.75 (+1.61%)
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 Cap28.35B
Analysts51.76
Price Target46.37 (-1.95%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.7% |
Yearly Dividend1.24
Dividend Growth(5Y)4.69%
DP64.27%
Div Incr Years7
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)9.17%
Min Revenue beat(2)8.3%
Max Revenue beat(2)10.03%
Revenue beat(4)4
Avg Revenue beat(4)5.72%
Min Revenue beat(4)1.6%
Max Revenue beat(4)10.03%
Revenue beat(8)5
Avg Revenue beat(8)-0.75%
Revenue beat(12)6
Avg Revenue beat(12)-2.79%
Revenue beat(16)6
Avg Revenue beat(16)-3.84%
PT rev (1m)1.22%
PT rev (3m)2.26%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.72%
EPS NY rev (1m)0.07%
EPS NY rev (3m)0.53%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)2.76%
Revenue NY rev (3m)3.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.63 | ||
| Fwd PE | 22.77 | ||
| P/S | 3.34 | ||
| P/FCF | N/A | ||
| P/OCF | 11.19 | ||
| P/B | 2.34 | ||
| P/tB | 2.56 | ||
| EV/EBITDA | 15.63 |
EPS(TTM)1.92
EY4.06%
EPS(NY)2.08
Fwd EY4.39%
FCF(TTM)-0.46
FCFYN/A
OCF(TTM)4.23
OCFY8.94%
SpS14.15
BVpS20.17
TBVpS18.44
PEG (NY)3.6
PEG (5Y)3.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.15% | ||
| ROE | 9.56% | ||
| ROCE | 5.93% | ||
| ROIC | 5.08% | ||
| ROICexc | 5.2% | ||
| ROICexgc | 5.37% | ||
| OM | 23.18% | ||
| PM (TTM) | 13.63% | ||
| GM | 51.17% | ||
| 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-Score5
Asset Turnover0.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.37 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 5.73 | ||
| Cap/Depr | 305.22% | ||
| Cap/Sales | 33.1% | ||
| Interest Coverage | 3.06 | ||
| Cash Conversion | 87.77% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.6 | ||
| Altman-Z | 1.3 |
F-Score5
WACC6.22%
ROIC/WACC0.82
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)6.54%
EPS 3Y6.19%
EPS 5Y8.16%
EPS Q2Q%10.45%
EPS Next Y6.84%
EPS Next 2Y6.8%
EPS Next 3Y7.7%
EPS Next 5Y6.36%
Revenue 1Y (TTM)8.16%
Revenue growth 3Y5.5%
Revenue growth 5Y5.54%
Sales Q2Q%5.86%
Revenue Next Year6.65%
Revenue Next 2Y5.2%
Revenue Next 3Y4.33%
Revenue Next 5Y4.2%
EBIT growth 1Y6.79%
EBIT growth 3Y6.86%
EBIT growth 5Y8.47%
EBIT Next Year62.16%
EBIT Next 3Y24.61%
EBIT Next 5Y18.36%
FCF growth 1Y-328.12%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y5.06%
OCF growth 3Y5.65%
OCF growth 5Y9.44%