Hydro One Profitability Analysis
| H Stock | CAD 53.83 0.13 0.24% |
Net Income | First Reported 2009-03-31 | Previous Quarter 327 M | Current Value 421 M | Quarterly Volatility 131.1 M |
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
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| Gross Profit Margin | 0.35 | 0.27 |
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| Net Profit Margin | 0.096 | 0.12 |
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| Operating Profit Margin | 0.17 | 0.21 |
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| Pretax Profit Margin | 0.11 | 0.14 |
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| Return On Assets | 0.0376 | 0.0362 |
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| Return On Equity | 0.0755 | 0.0861 |
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For Hydro One profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Hydro One to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Hydro One utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Hydro One's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Hydro One over time as well as its relative position and ranking within its peers.
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Hydro One Return On Asset vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Hydro One's current stock value. Our valuation model uses many indicators to compare Hydro One value to that of its competitors to determine the firm's financial worth. Hydro One is rated # 2 in return on equity category among its peers. It also is rated # 2 in return on asset category among its peers reporting about 0.35 of Return On Asset per Return On Equity. The ratio of Return On Equity to Return On Asset for Hydro One is roughly 2.88 . At this time, Hydro One's Return On Equity is very stable compared to the past year. Comparative valuation analysis is a catch-all model that can be used if you cannot value Hydro One by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Hydro One's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.Hydro Return On Asset vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Hydro One |
| = | 0.11 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.
Hydro One |
| = | 0.0368 |
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Hydro Return On Asset Comparison
Hydro One is currently under evaluation in return on asset category among its peers.
Hydro One Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Hydro One, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Hydro One will eventually generate negative long term returns. The profitability progress is the general direction of Hydro One's change in net profit over the period of time. It can combine multiple indicators of Hydro One, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | -13.8 M | -14.5 M | |
| Operating Income | 2.3 B | 1.4 B | |
| Income Before Tax | 1.5 B | 955.1 M | |
| Total Other Income Expense Net | -558.9 M | -586.8 M | |
| Net Income | 1.3 B | 857.4 M | |
| Income Tax Expense | 162.9 M | 102.8 M | |
| Net Income From Continuing Ops | 1.3 B | 963.8 M | |
| Net Income Applicable To Common Shares | 1.3 B | 944.2 M | |
| Interest Income | 520.2 M | 323.1 M | |
| Net Interest Income | -562.5 M | -590.6 M | |
| Change To Netincome | 365.7 M | 384 M | |
| Net Income Per Share | 2.22 | 2.11 | |
| Income Quality | 2.52 | 2.07 | |
| Net Income Per E B T | 0.77 | 0.70 |
Hydro Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Hydro One. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Hydro One position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Hydro One's important profitability drivers and their relationship over time.
Hydro One Profitability Trends
Hydro One profitability trend refers to the progression of profit or loss within a business. An upward trend means that Hydro One's profit has generally increased over time, and a downward profitability trend means profits are declining. Recognizing problems early in profitability trends allows investors to address revenue and cost issues in advance. Investors and analysts usually monitor three types of profitability trends: gross, operating, and net. Gross profit is the difference between revenue and costs of goods sold. Operating profit is Hydro One's gross profit minus its overhead. After you account for other unusual revenue, expenses, and costs, you get net profit. Gross profit trends are often a good indicator of future profitability. If you have high gross profit margins, you have a better chance to cover overhead and make money.
Hydro One Profitability Drivers Correlations
One of the toughest challenges investors face today is learning how to quickly synthesize and read into endless financial statements and information provided by the company, SEC reporting, and various external parties. Understanding the correlation between Hydro One different financial indicators related to revenue and profit generation helps investors identify and prioritize their investing strategies towards Hydro One in a much-optimized way. Analyzing correlations between profit drivers that are directly associated with dollar figures is the most effective way to break down Hydro One's future profitability.
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Hydro One Earnings per Share Projection vs Actual
Use Hydro One in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Hydro One position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hydro One will appreciate offsetting losses from the drop in the long position's value.Hydro One Pair Trading
Hydro One Pair Trading Analysis
The ability to find closely correlated positions to Hydro One could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Hydro One when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Hydro One - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Hydro One to buy it.
The correlation of Hydro One is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Hydro One moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Hydro One moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Hydro One can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Hydro One position
In addition to having Hydro One in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Other Information on Investing in Hydro Stock
To fully project Hydro One's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Hydro One at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Hydro One's income statement, its balance sheet, and the statement of cash flows.