# Hydro One (H.TO)

Canonical: https://gigainvestors.com/s/H.TO

Analysis as of: 2026-10-16T07:34:39.057Z. Financial observations: FY2013–FY2026.

Listing currency: CAD. Reporting currency: CAD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: CAD 52.76 per share; close as of 2026-10-15.

Estimated value: low CAD 25.98 per share, central CAD 32.14 per share, high CAD 37.38 per share. Buy at or below the central value CAD 32.14 per share. Valuation as of 2026-10-16T07:34:39.057Z; scenarios are not confidence intervals.

Expected annual return: 7.2% at the stated quote. About 7.2% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CA 10-year bond 3.8% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.07×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.21×

- FY2018: 0.22×

- FY2019: 0.20×

- FY2020: 0.20×

- FY2021: 0.22×

- FY2022: 0.24×

- FY2023: 0.23×

- FY2024: 0.23×

- FY2025: 0.25×

- LTM to Jun 2026: 0.25×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 5.8%

- ROIC, second-lowest year: 5.0%

- Typical minus recent gross margin: -1.1 pp

- Typical gross margin (annual median): 22.4%

- Recent gross margin (lower of latest and 3-year median): 23.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 26.3%

- ROIC including acquisitions, ten-year median: 3.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 5.2%

- FY2017: 5.0%

- FY2018: 4.2%

- FY2019: 5.9%

- FY2020: 6.2%

- FY2021: 5.5%

- FY2022: 5.6%

- FY2023: 5.9%

- FY2024: 5.9%

- FY2025: 6.2%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.58×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CAD 3.3B

- Net income, five-year total: CAD 5.6B

- Return on incremental invested capital: 7.6%

- Working capital / revenue, annual change: 0.2 pp

- Working capital / revenue, change between three-year averages: 1.3 pp

- Working capital / revenue, final three-year average: 11.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: -0.20×

- FY2022: 0.99×

- FY2023: -0.06×

- FY2024: 0.99×

- FY2025: 0.99×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 5.0% vs 5.9%

- Per-share earnings: 1.18 to 1.93 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.1%

- Ordinary dilution, 5-year annual growth: -0.0%

- Market cap gain: CAD 19B

- Cumulative retained earnings: CAD 3.0B

- Diluted shares, 10-year annual growth: 0.1%

- Diluted shares, 5-year annual growth: -0.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 6.3%

- Per-share value change: CAD 0.75

- Per-share value, starting three-year median: CAD 1.18

- Per-share value, ending three-year median: CAD 1.93

- Average buyback yield: 2.4%

- Buyback history: 1 years

- Debt-funded buybacks: No

- Acquisition spending: CAD 535M

- Cumulative net income, 10 years: CAD 10B

- ROIC, first three-year median: 5.0%

- ROIC, last three-year median: 5.9%

Chart: Earnings per share; fiscal year observations.

- FY2016: CAD 1.24

- FY2017: CAD 1.13

- FY2018: CAD 1.33

- FY2019: CAD 1.33

- FY2020: CAD 2.98

- FY2021: CAD 1.61

- FY2022: CAD 1.75

- FY2023: CAD 1.81

- FY2024: CAD 1.93

- FY2025: CAD 2.23

### accounting: pass

- Sloan accruals: -3.4%

- Receivables to sales index (DSRI): 1.13×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.01×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.08×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.6%

- FY2017: -4.0%

- FY2018: -3.0%

- FY2019: -3.0%

- FY2020: -0.8%

- FY2021: -3.9%

- FY2022: -3.8%

- FY2023: -4.0%

- FY2024: -3.8%

- FY2025: -3.4%

## Holders

## Price story

Price needs cash profits to grow 9.4% a year for ten years · "Hydro One Q2 Profit Rises on Higher Rates, Energy Demand" (finance.yahoo.com, Aug 2025) · sales +5.3%

Story as of 2026-10-16T10:00:01.727Z; price observation 2026-10-15.

Price needs cash profits to grow 9.4% a year for ten years

- 2025-08-14: Hydro One Q2 Profit Rises on Higher Rates, Energy Demand ([finance.yahoo.com](https://finance.yahoo.com/news/hydro-one-q2-profit-rises-060000212.html))

- 2025-11-13: Hydro One Q3 Profit Rises on Higher Rates and Stronger Demand ([finance.yahoo.com](https://finance.yahoo.com/news/hydro-one-q3-profit-rises-124535165.html))

### Sales · FY2025–2026

sales +5.3%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2017: CAD 6.0B 

- FY2018: CAD 6.2B 

- FY2019: CAD 6.5B 

- FY2020: CAD 7.3B 

- FY2021: CAD 7.2B 

- FY2022: CAD 7.8B 

- FY2023: CAD 7.8B 

- FY2024: CAD 8.5B 

- FY2025: CAD 9.0B 

- FY2026: CAD 9.5B 

### Gross margin · FY2025

gross margin 24.8%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 19.5% 

- FY2017: 20.6% 

- FY2018: 22.4% 

- FY2019: 20.2% 

- FY2020: 20.3% 

- FY2021: 22.3% 

- FY2022: 23.5% 

- FY2023: 23.5% 

- FY2024: 23.2% 

- FY2025: 24.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in utilities regulated electric; annual sales are CAD 9 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2025: revenue 9041000000; grossProfit 2238000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); H.TO: Hydro One Limited operates as an electricity transmission and distribution company in Ontario. It operates through three segments: Transmission, Distribution, and Other. The company owns and operates approximately 30,000 circuit kilometers of high-voltage transmission lines and approximately 126,000 circuit kilometers primary low-voltage distribution lines. It provides telecommunications support services for its transmission and distribution businesses; and information and communications technology services and solutions. It serves residential, small business, commercial, and industrial customers, as well as municipal utilities. Hydro One Limited was incorporated in 2015 and is headquartered in Toronto, Canada.

### Why customers stay

Margins ranged from 23.2% to 24.8% during 2023–25; it earns 5.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2023: grossProfit / revenue = 23.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2024: grossProfit / revenue = 23.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2025: grossProfit / revenue = 24.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); 10-year return on capital observations [[2016,0.05181945145371044],[2017,0.04971850555482806],[2018,0.042189488569408434],[2019,0.05919298721250734],[2020,0.06222184902174826],[2021,0.05517033243403905],[2022,0.05626145290380185],[2023,0.058749382520826364],[2024,0.059250106862236196],[2025,0.06229123888313009]]; median 0.05750541771231411. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 24% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); Gross margin observations: [[2021,0.22311418685121107],[2022,0.23547557840616967],[2023,0.23482916879143295]]; range within 2 percentage points.

### Where the cash goes

Earns 7.6% on new investment; paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2018: growth capex 480663329.65522444; upkeep 1057336670.3447756; owner earnings 575663329.6552244. Growth capex / owner earnings = 0.8349729866293598.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2019: growth capex 750000000; upkeep 878000000; owner earnings 780400000. Growth capex / owner earnings = 0.9610456176319836.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2020: growth capex 960000000; upkeep 884000000; owner earnings 1771600000. Growth capex / owner earnings = 0.5418830435764281.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2022: growth capex 1120000000; upkeep 966000000; owner earnings 1039000000. Growth capex / owner earnings = 1.0779595765158807.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2024: growth capex 1742000000; upkeep 1066000000; owner earnings 1145000000. Growth capex / owner earnings = 1.5213973799126637.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); FY2025: growth capex 1859000000; upkeep 1111000000; owner earnings 1330400000. Growth capex / owner earnings = 1.397324113048707.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); Incremental return on capital 0.0756206729256567, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); Dividend observations: [[2016,596000000],[2017,536000000],[2018,560000000],[2019,588000000],[2020,617000000],[2021,629000000],[2022,662000000],[2023,700000000],[2024,743000000],[2025,788000000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 47.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); H.TO SharesStats.PercentInsiders = 47.065 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 9.4% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:39.057Z); Ten-year compound average after fade. Initial solved rate 0.12275422273978687. Price 52.76; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.2851721710207704 → FY2025 2.2181399969122104. Closing-price date 2026-10-15.

## Monthly share-price history (CAD per share)

- 2016-10: CAD 24.47 per share

- 2016-11: CAD 23.08 per share

- 2016-12: CAD 23.58 per share

- 2017-01: CAD 24.05 per share

- 2017-02: CAD 23.60 per share

- 2017-03: CAD 24.25 per share

- 2017-04: CAD 24.04 per share

- 2017-05: CAD 23.74 per share

- 2017-06: CAD 23.23 per share

- 2017-07: CAD 22.36 per share

- 2017-08: CAD 23.17 per share

- 2017-09: CAD 22.72 per share

- 2017-10: CAD 22.81 per share

- 2017-11: CAD 22.74 per share

- 2017-12: CAD 22.40 per share

- 2018-01: CAD 22.21 per share

- 2018-02: CAD 20.55 per share

- 2018-03: CAD 20.92 per share

- 2018-04: CAD 20.39 per share

- 2018-05: CAD 19.46 per share

- 2018-06: CAD 20.04 per share

- 2018-07: CAD 19.00 per share

- 2018-08: CAD 19.28 per share

- 2018-09: CAD 19.64 per share

- 2018-10: CAD 19.15 per share

- 2018-11: CAD 19.66 per share

- 2018-12: CAD 20.25 per share

- 2019-01: CAD 20.59 per share

- 2019-02: CAD 20.65 per share

- 2019-03: CAD 20.76 per share

- 2019-04: CAD 21.68 per share

- 2019-05: CAD 22.90 per share

- 2019-06: CAD 22.84 per share

- 2019-07: CAD 23.31 per share

- 2019-08: CAD 24.68 per share

- 2019-09: CAD 24.49 per share

- 2019-10: CAD 24.49 per share

- 2019-11: CAD 25.02 per share

- 2019-12: CAD 25.08 per share

- 2020-01: CAD 26.90 per share

- 2020-02: CAD 26.94 per share

- 2020-03: CAD 25.34 per share

- 2020-04: CAD 25.24 per share

- 2020-05: CAD 26.68 per share

- 2020-06: CAD 25.53 per share

- 2020-07: CAD 28.54 per share

- 2020-08: CAD 27.00 per share

- 2020-09: CAD 28.22 per share

- 2020-10: CAD 29.11 per share

- 2020-11: CAD 30.30 per share

- 2020-12: CAD 28.65 per share

- 2021-01: CAD 29.63 per share

- 2021-02: CAD 27.02 per share

- 2021-03: CAD 29.27 per share

- 2021-04: CAD 29.47 per share

- 2021-05: CAD 30.69 per share

- 2021-06: CAD 29.96 per share

- 2021-07: CAD 30.80 per share

- 2021-08: CAD 31.40 per share

- 2021-09: CAD 29.94 per share

- 2021-10: CAD 29.57 per share

- 2021-11: CAD 31.23 per share

- 2021-12: CAD 32.91 per share

- 2022-01: CAD 32.84 per share

- 2022-02: CAD 31.30 per share

- 2022-03: CAD 33.68 per share

- 2022-04: CAD 34.73 per share

- 2022-05: CAD 35.28 per share

- 2022-06: CAD 34.61 per share

- 2022-07: CAD 35.75 per share

- 2022-08: CAD 35.56 per share

- 2022-09: CAD 33.78 per share

- 2022-10: CAD 34.16 per share

- 2022-11: CAD 37.62 per share

- 2022-12: CAD 36.27 per share

- 2023-01: CAD 36.38 per share

- 2023-02: CAD 35.41 per share

- 2023-03: CAD 38.48 per share

- 2023-04: CAD 39.68 per share

- 2023-05: CAD 38.69 per share

- 2023-06: CAD 37.85 per share

- 2023-07: CAD 37.20 per share

- 2023-08: CAD 35.12 per share

- 2023-09: CAD 34.58 per share

- 2023-10: CAD 35.96 per share

- 2023-11: CAD 37.72 per share

- 2023-12: CAD 39.70 per share

- 2024-01: CAD 39.90 per share

- 2024-02: CAD 40.45 per share

- 2024-03: CAD 39.50 per share

- 2024-04: CAD 38.56 per share

- 2024-05: CAD 39.26 per share

- 2024-06: CAD 39.85 per share

- 2024-07: CAD 43.27 per share

- 2024-08: CAD 45.81 per share

- 2024-09: CAD 46.88 per share

- 2024-10: CAD 44.83 per share

- 2024-11: CAD 45.79 per share

- 2024-12: CAD 44.27 per share

- 2025-01: CAD 45.22 per share

- 2025-02: CAD 46.34 per share

- 2025-03: CAD 48.39 per share

- 2025-04: CAD 53.04 per share

- 2025-05: CAD 50.53 per share

- 2025-06: CAD 49.07 per share

- 2025-07: CAD 49.00 per share

- 2025-08: CAD 50.01 per share

- 2025-09: CAD 49.65 per share

- 2025-10: CAD 51.73 per share

- 2025-11: CAD 54.74 per share

- 2025-12: CAD 54.64 per share

- 2026-01: CAD 53.83 per share

- 2026-02: CAD 58.62 per share

- 2026-03: CAD 57.45 per share

- 2026-04: CAD 58.36 per share

- 2026-05: CAD 56.70 per share

- 2026-06: CAD 58.50 per share

- 2026-07: CAD 58.40 per share

- 2026-08: CAD 53.36 per share

- 2026-09: CAD 50.71 per share

- 2026-10: CAD 51.46 per share

## Annual estimated value (CAD per share)

- FY2020: low CAD 13.45 per share, central CAD 15.16 per share, high CAD 17.44 per share

- FY2021: low CAD 12.97 per share, central CAD 14.67 per share, high CAD 16.92 per share

- FY2022: low CAD 17.73 per share, central CAD 20.09 per share, high CAD 23.23 per share

- FY2023: low CAD 18.40 per share, central CAD 22.42 per share, high CAD 26.14 per share

- FY2024: low CAD 21.75 per share, central CAD 24.83 per share, high CAD 28.71 per share

- FY2025: low CAD 24.57 per share, central CAD 30.43 per share, high CAD 35.41 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:40:25.163Z where newer inputs omit a numeric field or fiscal period.

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.