Hydro One Limited (H.TO) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-141.3%

-CA$23.10

vs CA$55.89 price

Levered DCF

-CA$33.18

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

1.38

Distress zone

Rating

B-

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	24.5×	22.94×	21.75×	20.73×	20.44×	9.68×	18.86×	-168.75×
P/B	2.59×	2.19×	2.02×	1.92×	1.81×	1.62×	1.53×	1.26×
P/S	3.62×	3.13×	3.01×	2.79×	2.72×	2.35×	2.31×	1.96×
EV / EBITDA	15.25×	14.23×	13.76×	12.95×	13.41×	13.02×	12.71×	10.7×
Gross margin	24.8%	23.2%	23.5%	23.5%	22.3%	20.3%	20.2%	22.4%
Operating margin	24.8%	23.2%	23.5%	23.5%	22.3%	20.3%	20.2%	22.4%
Net margin	14.8%	13.6%	13.8%	13.5%	13.4%	24.5%	12.3%	12.9%
Current ratio	0.61×	0.6×	0.5×	0.51×	0.61×	0.67×	0.41×	0.49×
Debt / equity	1.52×	1.47×	1.35×	1.34×	1.35×	1.37×	1.3×	1.3×
Interest coverage	3.23×	3.03×	3.15×	3.69×	3.57×	3.16×	2.63×	2.8×
Dividend yield	2.4%	2.8%	3.0%	3.0%	3.2%	3.6%	3.9%	4.6%
Payout ratio	58.8%	64.3%	64.5%	63.0%	65.2%	34.5%	73.9%	70.4%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	10.6%	9.6%	9.3%	9.3%	8.9%	17.0%	8.1%	8.3%
Return on invested capital	5.2%	4.9%	5.1%	4.8%	4.7%	5.1%	5.1%	-0.4%
Return on assets	3.4%	3.2%	3.3%	3.3%	3.2%	5.9%	2.9%	3.1%
Free cash flow yield	-0.8%	-1.0%	0.3%	0.8%	0.4%	1.1%	-0.1%	0.3%
Earnings yield	4.1%	4.4%	4.6%	4.8%	4.9%	10.4%	5.3%	6.6%
Enterprise value	CA$51.4B	CA$43.6B	CA$39.3B	CA$36.4B	CA$33.9B	CA$30.8B	CA$27.6B	CA$24B
Net debt / EBITDA	5.53×	5.56×	5.49×	5.22×	5.62×	5.78×	5.83×	5.33×
Cash conversion cycle (days)	42	35	35	33	17	18	30	34