Hydro One’s Ambitious Growth Plan: 6-8% EPS Growth by 2027

Hydro One, a Canadian utility company, has unveiled its growth strategy, aiming to deliver 6-8% earnings per share (EPS) growth through 2027. This ambitious plan is backed by a significant investment of $3.1 billion in capital expenditures for 2024. But can the company’s shareholders expect a substantial return on their investment?

A $3.1 Billion Bet

Hydro One’s growth strategy is built around a massive investment in capital expenditures, totaling $3.1 billion in 2024. This substantial outlay is a clear indication of the company’s commitment to driving growth and expansion. However, it also raises questions about the potential risks and challenges associated with such a significant investment.

Stock Performance: A Mixed Bag

As of the last trading day, Hydro One’s stock price closed at 47.29 CAD, with a 52-week high of 48.05 CAD and a low of 37.27 CAD. While the stock price has shown some volatility, it remains to be seen whether the company’s growth strategy will translate into sustained long-term gains for shareholders.

Valuation Metrics: A Closer Look

Hydro One’s price-to-earnings ratio stands at 23.61, while the price-to-book ratio is 2.25. These valuation metrics suggest that the company’s stock is currently trading at a premium. However, whether this premium is justified remains to be seen, and investors will be watching closely to see if the company’s growth strategy can deliver the expected returns.

Key Takeaways

• Hydro One aims to deliver 6-8% EPS growth through 2027
• The company plans to invest $3.1 billion in capital expenditures in 2024
• Hydro One’s stock price closed at 47.29 CAD as of the last trading day
• The company’s price-to-earnings ratio stands at 23.61, while the price-to-book ratio is 2.25