Hydro One dividend: cash coverage and yield
Hydro One's dividend rose from C$629 million to C$788 million over the period. Free cash flow was negative C$355 million in 2025, so cash did not cover the dividend.
How much does Hydro One pay its shareholders?
Dividends also continued rising. They increased from C$629 million to C$788 million and totalled C$3.522 billion over the period. After payments to minority owners, Hydro One paid C$4.013 billion beyond free cash flow. There were no share buybacks.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| EPS, diluted | 2.23 | 1.92 | 1.81 | 1.75 | 1.61 |
| − Dividends paid, per share | 1.31 | 1.24 | 1.17 | 1.10 | 1.05 |
| − Share buybacks, per share | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
What this means. Real free cash flow per share is lower than free cash flow per share because it also subtracts the value of shares given to employees as pay.
Does Hydro One's cash cover the dividend?
Free cash flow is operating cash after capital spending. Subtracting stock compensation as an economic cost gives real free cash flow of negative C$379 million. This does not mean the company paid that compensation again in cash; it recognizes the cost borne by shareholders.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Free cash flow | -355 | -274 | -64 | 174 | 78 |
| − Dividends paid | 788 | 743 | 700 | 662 | 629 |
| − Share buybacks | 0 | 0 | 0 | 0 | 0 |
| = Paid out more than the free cash flow | 1,155 | 1,027 | 774 | 498 | 559 |
What could change Hydro One's dividend?
Management targets 6%–8% compound annual EPS growth through 2027, implying 2027 EPS of C$2.15–C$2.37. It targets average annual dividend growth of 6% through 2027, subject to board approval and cash needs.
Dividends rise moderately in the base case from C$1.4971 to C$1.572 and C$1.6506 per share. The path follows management’s 6% target through 2027, then slows to 5% annually. The bear case increases the dividend to C$1.4406 and then holds it flat because free cash flow was negative C$355 million in 2025. The bull case reaches C$1.5113, C$1.6171 and C$1.7303, requiring earnings and financing conditions strong enough to sustain 7% growth.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Earnings | 1,433 (1,370 / 1,480) | 1,533 (1,360 / 1,600) | 1,641 (1,380 / 1,730) |
| Dividends per share | 1.50 (1.44 / 1.51) | 1.57 (1.44 / 1.62) | 1.65 (1.44 / 1.73) |
| Price to earnings | 22.00 (19.50 / 24.00) | 21.50 (18.50 / 24.50) | 21.00 (18.00 / 25.20) |
What this means. Price to earnings shows how much investors pay for each unit of the company's earnings.
What is Hydro One's dividend yield today?
Hydro One’s diluted EPS rose from C$1.61 in 2021 to C$2.23 in 2025, but computed free cash flow per share turned negative C$0.63 in 2025. Its own reported free cash flow was negative 4.2% of revenue. At 22.5x trailing P/E, the 2.7% dividend yield leaves current income modest.