Hydro One (H) AI Stock Analysis

• Market Cap: C$31.52B
• Dividend Yield: 2.49%
• Average Volume (3M): 1.16M
• Price to Earnings (P/E): 25.1
• Beta (1Y): 0.25
• Revenue Growth: 8.03%
• EPS Growth: 11.78%
• Country: CA
• Employees: 7,261
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.54
• Shares Outstanding: 599,777,160
• 10 Day Avg. Volume: 877,316
• 30 Day Avg. Volume: 1,163,016
• PEG Ratio: 3.46
• Price to Book (P/B): 2.19
• Price to Sales (P/S): 3.13
• P/FCF Ratio: -96.84
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$51.75
• Price Target Upside: -0.52% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

• Rating: 71 Outperform
• Price Target: C$54.00 ▲(3.81% Upside)

Hydro One's overall stock score is driven by strong financial performance and positive earnings call highlights, including revenue and EPS growth. However, technical indicators suggest a neutral to slightly bearish trend, and valuation metrics indicate potential overvaluation. The company's high leverage and negative free cash flow require careful monitoring.

Positive Factors

Revenue Growth

Consistent revenue growth driven by approved rate increases and higher energy consumption indicates strong market demand and operational efficiency.

Strategic Projects

New transmission projects enhance Hydro One's growth prospects and strengthen its infrastructure, supporting long-term operational expansion.

Recognition and Awards

Recognition for corporate citizenship and culture enhances Hydro One's reputation, potentially attracting talent and fostering stakeholder trust.

Negative Factors

High Leverage

High leverage can constrain financial flexibility and increase risk, especially if interest rates rise or cash flows become strained.

Negative Free Cash Flow

Negative free cash flow suggests potential liquidity issues, requiring careful cash management to sustain capital investments and operations.

Increased Costs

Rising interest and tax expenses can pressure profitability and reduce net income, affecting long-term financial health and shareholder returns.

Hydro One Business Overview & Revenue Model

Company Description

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 of high-voltage transmission lines and 125,000 circuit kilometers of primary low-voltage distribution network. It serves approximately 1.5 million residential, small business, commercial, and industrial customers. The company also provides telecommunications support services for its transmission and distribution businesses; and information and communications technology services and solutions. Hydro One Limited was incorporated in 2015 and is headquartered in Toronto, Canada.

How the Company Makes Money

Hydro One makes money primarily through regulated electricity transmission and distribution operations. As a regulated utility, its revenue is largely determined by rates set by the Ontario Energy Board (OEB), which reflects the costs of providing service plus an allowed rate of return. The company's revenue streams include transmission tariffs charged to electricity generators and distributors for using its network to transport electricity, and distribution charges to end-users for delivering electricity to homes and businesses. Hydro One also engages in ancillary services and other electricity-related businesses, which complement its core operations. The stability and predictability of its earnings are bolstered by the regulatory framework and its monopoly status in key service areas, making it a reliable income generator.

Hydro One Financial Statement Overview

Summary

Hydro One demonstrates strong revenue growth and stable profitability, supported by solid operational margins. While the balance sheet shows high leverage, the company maintains a reasonable return on equity. Cash flow management requires attention due to negative free cash flow, but operating cash flow remains robust. Overall, the company is in a strong financial position with some areas needing careful monitoring.

Income Statement

Hydro One has shown strong revenue growth with a 40.1% increase in the TTM period, indicating robust demand and operational efficiency. The gross profit margin is healthy at 32.98%, though slightly lower than previous periods. Net profit margin remains stable at 13.99%, reflecting consistent profitability. EBIT and EBITDA margins are solid, showcasing effective cost management and operational leverage.

Balance Sheet

The company's debt-to-equity ratio is relatively high at 1.45, indicating significant leverage, which could pose risks if not managed carefully. However, the return on equity is decent at 10.10%, suggesting effective use of equity capital. The equity ratio is stable, reflecting a balanced asset structure.

Cash Flow

Operating cash flow is strong, but the free cash flow is negative, indicating potential challenges in covering capital expenditures. The operating cash flow to net income ratio is healthy, showing good cash generation relative to net income. However, the negative free cash flow to net income ratio highlights the need for careful cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.76B	8.48B	7.84B	7.78B	7.22B	7.29B
Gross Profit	2.12B	1.97B	1.84B	1.83B	1.61B	1.48B
EBITDA	3.23B	3.06B	2.85B	2.81B	2.52B	2.36B
Net Income	1.26B	1.16B	1.08B	1.05B	965.00M	1.79B
Balance Sheet
Total Assets	37.81B	36.68B	32.85B	31.46B	30.38B	30.29B
Cash, Cash Equivalents and Short-Term Investments	71.00M	716.00M	79.00M	530.00M	540.00M	757.00M
Total Debt	18.15B	17.73B	15.74B	15.19B	14.72B	14.41B
Total Liabilities	25.33B	24.51B	21.09B	20.07B	19.41B	19.67B
Stockholders Equity	12.39B	12.09B	11.68B	11.31B	10.89B	10.53B
Cash Flow
Free Cash Flow	-401.00M	-274.00M	67.00M	174.00M	78.00M	186.00M
Operating Cash Flow	2.44B	2.53B	2.41B	2.26B	2.15B	2.03B
Investing Cash Flow	-3.38B	-3.13B	-2.69B	-2.07B	-2.06B	-1.97B
Financing Cash Flow	941.00M	1.23B	-172.00M	-197.00M	-303.00M	665.00M

Hydro One Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 52.02
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:H, the sentiment is Positive. The current price of 52.02 is above the 20-day moving average (MA) of 51.14, above the 50-day MA of 50.12, and above the 200-day MA of 48.36, indicating a bullish trend. The MACD of 0.84 indicates Negative momentum. The RSI at 61.87 is Neutral, neither overbought nor oversold. The STOCH value of 50.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:H.

Hydro One Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTS	―	$35.58B	20.77	7.50%	3.48%	4.22%	6.63%
H	―	C$31.52B	25.13	10.34%	2.49%	8.03%	11.78%
CPX	―	C$11.06B	22.26	10.00%	3.75%	-16.83%	-37.24%
EMA	―	$20.30B	23.01	7.12%	5.32%	10.65%	14.09%
CU	―	C$10.80B	24.20	7.52%	4.52%	-0.51%	-17.17%
Sector *	―	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
BEP.UN	―	$29.00B	―	-5.97%	4.67%	20.05%	-54.69%

Hydro One Corporate Events

Hydro One’s Earnings Call Highlights Growth Amid Challenges

Hydro One’s recent earnings call painted a picture of robust financial health, marked by impressive revenue and earnings per share growth. The company is on a promising trajectory with strategic transmission projects and positive recognitions enhancing its forward momentum. However, challenges such as the financial impacts of the March 2025 ice storm and increased expenses due to debt and taxes were also highlighted, presenting potential areas of concern for stakeholders.

Hydro One Inc. Announces $1.1 Billion Sustainable Notes Offering

Hydro One Inc., a subsidiary of Hydro One Limited, has announced the pricing of a $1.1 billion offering of Medium Term Notes under its Sustainable Financing Framework. The proceeds from this issuance will be allocated to finance or refinance eligible green projects, although it is not a default event if the allocation does not occur. This move underscores Hydro One’s commitment to sustainable investment, potentially enhancing its industry positioning and offering implications for stakeholders interested in green energy initiatives.

The most recent analyst rating on (TSE:H) stock is a Buy with a C$56.00 price target. To see the full list of analyst forecasts on Hydro One stock, see the TSE:H Stock Forecast page.

Hydro One Announces Leadership Changes Amid CEO’s Temporary Leave

Hydro One Limited announced that its President and CEO, David Lebeter, will take a temporary compassionate care leave, and Harry Taylor has been appointed as Interim President and CEO. Taylor, who joined Hydro One in 2024, will continue his role as EVP, Chief Financial and Regulatory Officer. Additionally, Michael W. Rencheck has been appointed to the Board of Directors, bringing over four decades of experience in the energy industry. These leadership changes are expected to maintain the company’s operational stability and strategic growth during Lebeter’s absence.

The most recent analyst rating on (TSE:H) stock is a Hold with a C$44.00 price target. To see the full list of analyst forecasts on Hydro One stock, see the TSE:H Stock Forecast page.

Hydro One Reports Strong Q2 2025 Financial Results

Hydro One Limited released its unaudited interim consolidated financial statements for the three and six months ended June 30, 2025. The company reported a net income of CAD 329 million for the second quarter of 2025, an increase from CAD 295 million in the same period in 2024. This financial performance reflects a stable growth trajectory, with revenues from distribution and transmission services showing slight increases compared to the previous year. The results underscore Hydro One’s strong market positioning and its ability to maintain profitability despite operational costs.

The most recent analyst rating on (TSE:H) stock is a Hold with a C$44.00 price target. To see the full list of analyst forecasts on Hydro One stock, see the TSE:H Stock Forecast page.

Hydro One Reports Strong Q2 2025 Results and Continued Investments

On August 13, 2025, Hydro One Limited announced its second-quarter financial results, highlighting an increase in basic earnings per share to $0.54 from $0.49 in the same period in 2024. This improvement was driven by higher revenues from Ontario Energy Board-approved rates and increased energy consumption. The company also reported a net income of $327 million, up from $292 million the previous year. Hydro One continues to make significant capital investments to enhance the reliability and performance of Ontario’s electricity systems. The company also announced a quarterly dividend and highlighted its recognition in various corporate responsibility and employer rankings.

The most recent analyst rating on (TSE:H) stock is a Hold with a C$44.00 price target. To see the full list of analyst forecasts on Hydro One stock, see the TSE:H Stock Forecast page.