Hydro One (TSE:H) Posts Earnings Results

Hydro One (TSE:H) posted its quarterly earnings results on Wednesday. The company reported C$0.62 earnings per share for the quarter, FiscalAI reports. Hydro One had a net margin of 14.78% and a return on equity of 10.87%. The business had revenue of C$1.23 billion during the quarter.

Here are the key takeaways from Hydro One’s conference call:

• Second-quarter earnings increased: Net income attributable to common shareholders rose 13.1% year over year, with EPS reaching CAD 0.62 versus CAD 0.54, driven by higher approved rates, demand, customer growth, and lower storm-related asset removal costs.
• Hydro One submitted applications for three major transmission projects representing more than CAD 3.4 billion of planned investment, with expected in-service dates between 2029 and 2030; the company also advanced the CAD 100 million Orléans reinforcement project and the Red Lake transmission line.
• The expected acceleration in capital spending during the 2028–2032 rate period will require additional financing to protect Hydro One’s A credit rating. Management expects to use hybrid debt and potentially an ATM or larger equity issuance, creating potential shareholder dilution.
• Ontario’s wildfire activity is significantly above normal, but management said there has been no major operational impact and no fires have been attributed to Hydro One assets; any eligible restoration investment would generally be added to rate base for recovery.
• Management maintained its expectation for 6%–8% annual EPS growth during the current rate period and declared a quarterly dividend of CAD 0.3531 per share. The company expects to file its 2028–2032 joint rate application in October, with proposals focused on grid reliability, resilience, electrification, and growth.

Hydro One Trading Down 0.5%

Shares of H opened at C$56.45 on Friday. Hydro One has a twelve month low of C$48.22 and a twelve month high of C$60.57. The company has a market cap of C$33.88 billion, a P/E ratio of 24.76, a P/E/G ratio of 3.17 and a beta of 0.35. The company has a current ratio of 0.54, a quick ratio of 0.30 and a debt-to-equity ratio of 149.17. The company’s fifty day simple moving average is C$57.92 and its 200-day simple moving average is C$57.68.

Hydro One Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Tuesday, June 30th. Stockholders of record on Tuesday, June 30th were paid a $0.3531 dividend. This is an increase from Hydro One’s previous quarterly dividend of $0.33. This represents a $1.41 annualized dividend and a dividend yield of 2.5%. The ex-dividend date of this dividend was Wednesday, June 10th. Hydro One’s payout ratio is currently 58.44%.

Analyst Upgrades and Downgrades

A number of equities analysts have recently weighed in on H shares. BMO Capital Markets upped their price objective on Hydro One from C$55.00 to C$58.00 and gave the stock a “market perform” rating in a research note on Thursday, May 14th. Jefferies Financial Group lowered Hydro One from a “hold” rating to a “moderate sell” rating in a research note on Monday, June 1st. Raymond James Financial raised their price target on Hydro One from C$57.00 to C$58.00 and gave the company a “market perform” rating in a report on Tuesday, April 28th. National Bank Financial lifted their price objective on Hydro One from C$56.00 to C$61.00 and gave the stock a “sector perform” rating in a research note on Monday, June 1st. Finally, Royal Bank Of Canada upped their price objective on Hydro One from C$58.00 to C$60.00 and gave the stock a “sector perform” rating in a report on Thursday. One analyst has rated the stock with a Buy rating, seven have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Hydro One presently has an average rating of “Hold” and an average price target of C$57.09.

Hydro One Company Profile

Hydro One operates regulated transmission and distribution assets in Ontario. The area’s largest electricity provider serves nearly 1.5 million customers. Transmission accounts for roughly 60% of the company’s rate base, with distribution accounting for the remainder. Hydro One operates a small telecom business, Acronym Solutions, with annual revenue contributing less than 1% to consolidated results. The province of Ontario holds an approximate 47% common equity stake.