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H

Hydro OneTSX:H Stock Report

Market Cap

CA$18.4b

7D

-1.9%

1Y

6.7%

Updated

27 Sep, 2021

Data

Company Financials +
H fundamental analysis
Snowflake Score
Valuation4/6
Future Growth1/6
Past Performance2/6
Financial Health1/6
Dividends3/6

H Overview

Hydro One Limited, through its subsidiaries, operates as an electricity transmission and distribution company in Ontario.

Hydro One Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Hydro One
Historical stock prices
Current Share PriceCA$30.38
52 Week HighCA$26.38
52 Week LowCA$32.14
Beta0.19
1 Month Change-3.13%
3 Month Change0.96%
1 Year Change6.71%
3 Year Change53.75%
5 Year Change17.71%
Change since IPO40.52%

Recent News & Updates

Shareholder Returns

HCA Electric UtilitiesCA Market
7D-1.9%-1.2%-0.3%
1Y6.7%12.9%30.8%

Return vs Industry: H underperformed the Canadian Electric Utilities industry which returned 12.9% over the past year.

Return vs Market: H underperformed the Canadian Market which returned 30.8% over the past year.

Price Volatility

Is H's price volatile compared to industry and market?
H volatility
H Beta0.19
Industry Beta0.43
Market Beta1

Stable Share Price: H is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 1% a week.

Volatility Over Time: H's weekly volatility (1%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20155,950Mark Poweskahttps://www.hydroone.com

Hydro One Limited, through its subsidiaries, operates as an electricity transmission and distribution company in Ontario. It operates through three segments: Transmission Business, Distribution Business, and Other. The company owns and operates approximately 30,000 circuit kilometers (KMs) of high-voltage transmission lines and 124,000 circuit KMs of primary low-voltage distribution network.

Hydro One Fundamentals Summary

How do Hydro One's earnings and revenue compare to its market cap?
H fundamental statistics
Market CapCA$18.38b
Earnings (TTM)CA$948.00m
Revenue (TTM)CA$7.30b

19.2x

P/E Ratio

2.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
H income statement (TTM)
RevenueCA$7.30b
Cost of RevenueCA$4.88b
Gross ProfitCA$2.43b
ExpensesCA$1.48b
EarningsCA$948.00m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)1.58
Gross Margin33.21%
Net Profit Margin12.98%
Debt/Equity Ratio130.0%

How did H perform over the long term?

See historical performance and comparison

Dividends

3.5%

Current Dividend Yield

64%

Payout Ratio

Valuation

Is Hydro One undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: H (CA$30.73) is trading below our estimate of fair value (CA$98.63)

Significantly Below Fair Value: H is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: H is good value based on its PE Ratio (19.4x) compared to the North American Electric Utilities industry average (21.5x).

PE vs Market: H is poor value based on its PE Ratio (19.4x) compared to the Canadian market (12.6x).


Price to Earnings Growth Ratio

PEG Ratio: H is poor value based on its PEG Ratio (4x)


Price to Book Ratio

PB vs Industry: H is good value based on its PB Ratio (1.7x) compared to the XN Electric Utilities industry average (1.9x).


Future Growth

How is Hydro One forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

4.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: H's forecast earnings growth (4.8% per year) is above the savings rate (1.5%).

Earnings vs Market: H's earnings (4.8% per year) are forecast to grow slower than the Canadian market (12.1% per year).

High Growth Earnings: H's earnings are forecast to grow, but not significantly.

Revenue vs Market: H's revenue (3.1% per year) is forecast to grow slower than the Canadian market (6.1% per year).

High Growth Revenue: H's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: H's Return on Equity is forecast to be low in 3 years time (9.2%).


Past Performance

How has Hydro One performed over the past 5 years?

19.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: H has high quality earnings.

Growing Profit Margin: H's current net profit margins (13%) are lower than last year (26.1%).


Past Earnings Growth Analysis

Earnings Trend: H's earnings have grown by 19.8% per year over the past 5 years.

Accelerating Growth: H's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: H had negative earnings growth (-46.7%) over the past year, making it difficult to compare to the Electric Utilities industry average (1.2%).


Return on Equity

High ROE: H's Return on Equity (8.9%) is considered low.


Financial Health

How is Hydro One's financial position?


Financial Position Analysis

Short Term Liabilities: H's short term assets (CA$1.4B) do not cover its short term liabilities (CA$3.1B).

Long Term Liabilities: H's short term assets (CA$1.4B) do not cover its long term liabilities (CA$16.4B).


Debt to Equity History and Analysis

Debt Level: H's debt to equity ratio (130%) is considered high.

Reducing Debt: H's debt to equity ratio has increased from 105.9% to 130% over the past 5 years.

Debt Coverage: H's debt is not well covered by operating cash flow (14.5%).

Interest Coverage: H's interest payments on its debt are well covered by EBIT (3.3x coverage).


Balance Sheet


Dividend

What is Hydro One current dividend yield, its reliability and sustainability?

3.51%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: H's dividend (3.47%) is higher than the bottom 25% of dividend payers in the Canadian market (1.66%).

High Dividend: H's dividend (3.47%) is low compared to the top 25% of dividend payers in the Canadian market (4.59%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, H has been paying a dividend for less than 10 years.

Growing Dividend: H's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.4%), H's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: H's dividends in 3 years are forecast to be covered by earnings (68.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Mark Poweska (51 yo)

2.33yrs

Tenure

CA$1,076,674

Compensation

Mr. Mark Poweska, P.Eng., has been the Chief Executive Officer and President of Hydro One Limited since May 10, 2019 and serves as its Director since May 10, 2019. Mr. Poweska has been the President, Chief...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD848.13K) is below average for companies of similar size in the Canadian market ($USD6.01M).

Compensation vs Earnings: Mark's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: H's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

Experienced Board: H's board of directors are considered experienced (3.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Hydro One Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Hydro One Limited
  • Ticker: H
  • Exchange: TSX
  • Founded: 2015
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: CA$18.383b
  • Shares outstanding: 598.22m
  • Website: https://www.hydroone.com

Number of Employees


Location

  • Hydro One Limited
  • South Tower
  • 8th Floor
  • Toronto
  • Ontario
  • M5G 2P5
  • Canada

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/27 22:10
End of Day Share Price2021/09/27 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.