Hydro One Ltd. (H) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Algonquin Power & Utilities Corp.

Emera, Inc.

Capital Power Corp.

Fortis, Inc.

Hydro One Ltd.

Brookfield Renewable Partners LP

ATCO Ltd.

Northland Power, Inc.

TransAlta Corp.

Boralex, Inc.

TransAlta Renewables, Inc.

Why is Hydro One Ltd. ?

Poor Management Efficiency with a low ROCE of 6.68%

The company has been able to generate a Return on Capital Employed (avg) of 6.68% signifying low profitability per unit of total capital (equity and debt)

Poor long term growth as Net Sales has grown by an annual rate of 5.11% and Operating profit at 7.71% over the last 5 years

Flat results in Jun 25

DEBT-EQUITY RATIO (HY) Highest at 145.9 %
DIVIDEND PAYOUT RATIO(Y) Lowest at 61.21%
DEBTORS TURNOVER RATIO(HY) Lowest at 6.99%

With ROE of 10.21%, it has a expensive valuation with a 2.34 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 5.66%, its profits have risen by 11.7% ; the PEG ratio of the company is 2

Underperformed the market in the last 1 year

The stock has generated a return of 5.66% in the last 1 year, much lower than market (S&P/TSX 60) returns of 22.54%

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Power)

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is Hydro One Ltd. for you?

Low Risk, Medium Return

Absolute

Risk Adjusted

Volatility

Hydro One Ltd.

21.67%

1.42

14.96%

S&P/TSX 60

23.72%

1.54

14.62%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

4.40%

EBIT Growth (5y)

8.59%

EBIT to Interest (avg)

3.35

Debt to EBITDA (avg)

5.54

Net Debt to Equity (avg)

1.44

Sales to Capital Employed (avg)

0.29

Tax Ratio

13.86%

Dividend Payout Ratio

58.93%

Pledged Shares

Institutional Holding

0.06%

ROCE (avg)

6.68%

ROE (avg)

10.97%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.84

EV to EBIT

24.34

EV to EBITDA

16.27

EV to Capital Employed

1.74

EV to Sales

6.03

PEG Ratio

1.69

Dividend Yield

ROCE (Latest)

7.17%

ROE (Latest)

10.67%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

Bullish

Bearish

Bollinger Bands

Mildly Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Mildly Bearish

Dow Theory

Bullish

OBV

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

9What is working for the Company

OPERATING CASH FLOW(Y)

Highest at CAD 2,695 MM

ROCE(HY)

Highest at 10.83%

DIVIDEND PER SHARE(HY)

Highest at CAD 6.63

RAW MATERIAL COST(Y)

Fallen by -7.49% (YoY

INVENTORY TURNOVER RATIO(HY)

Highest at 226.77 times

-6What is not working for the Company

DEBT-EQUITY RATIO (HY)

Highest at 147.15 %

DIVIDEND PAYOUT RATIO(Y)

Lowest at 85.74%

DEBTORS TURNOVER RATIO(HY)

Lowest at 6.63 times

PRE-TAX PROFIT(Q)

At CAD 264 MM has Fallen at -30.62%

NET PROFIT(Q)

At CAD 233 MM has Fallen at -28.64%

Here's what is working for Hydro One Ltd.

Operating Cash Flow

Highest at CAD 2,695 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (CAD MM)

Dividend per share

Highest at CAD 6.63 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (CAD)

Inventory Turnover Ratio

Highest at 226.77 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Raw Material Cost

Fallen by -7.49% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Hydro One Ltd.

Debt-Equity Ratio

Highest at 147.15 % and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Pre-Tax Profit

At CAD 264 MM has Fallen at -30.62%

over average net sales of the previous four periods of CAD 380.5 MM

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (CAD MM)

Net Profit

At CAD 233 MM has Fallen at -28.64%

over average net sales of the previous four periods of CAD 326.5 MM

MOJO Watch

Near term Net Profit trend is negative

Net Profit (CAD MM)

Debtors Turnover Ratio

Lowest at 6.63 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Dividend Payout Ratio

Lowest at 85.74%

in the last five years

MOJO Watch

Company is distributing lower proportion of profits generated as dividend

DPR (%)