Hydro One IPO (H-TSX)

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SkaSka
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Hydro One IPO (H-TSX)

Post by SkaSka »

Haven't looked too much into it, but anyone looking to buy some Hydro One when the IPO opens?

Pros and Cons of buying the de facto monopoly energy provider in Ontario?

Of course one would have to look closely at the balance sheets, income statements, and cash flows to get a better grasp of the financial health of the company (which I have not done).

Ontario to Sell 60% of Hydro One in IPO
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Re: Hydro One IPO

Post by Hammerer »

Is there any chance us proletariats will be able to get in?
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Re: Hydro One IPO

Post by kcowan »

Ask your broker. I used to have an RBC brokerage account just to get in on all their IPOs.
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Re: Hydro One IPO

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Well, since the prospectus came out, I had a quick lookie lou through the multi-hundred page document (if that is what you would call a good Friday night's reading :lol: )

Some basic highlights:

Cash Flow from Operations was $1.256 billion in 2014 and $0.911 billion in 2004, giving a 10 year CAGR of 3.3%.

Net Income was $747 million in 2014 and $498 million in 2004, giving a 10 year CAGR of 4.1%.

Debt is rated at A by S&P and A1 by Moody's.

CapEx for the past 5 years was ~$1.5 billion/year and projected for the next 5 years to be ~$1.5 billion/year.

Revenue in 2014 was $6.548 billion.

Total Assets of $22.55 billion and Total Liabilities of $8.925 billion.

Hydro One has 1.2 million customers, which represents 24% of total customers in Ontario.

Annual dividend payout is anticipated to be ~$500 million initially, with a payout target of 70%-80% of net income.

Hydro One intends to have a DRIP program.

No one but the province can hold more than 10% of any class or series of Voting Shares.

I tried attaching the PDF of the prospectus but apparently it's too large. Go download it from Sedar. It's the filing titled "Other" loaded today, September 18, 2015.
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Re: Hydro One IPO

Post by brad911 »

TDW sent out the New Offering email at 9:42am.

I logged in at 9:47 (ish) to read the prospectus and it was closed.....
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Re: Hydro One IPO

Post by slim »

When I saw TD was sold out,I went into Investors Edge and bought some.
They still have some available.
I don't know how much I will be assigned.
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Re: Hydro One IPO

Post by rishitibriwal »

RBC DI still shows the Hydro One IPO as open as at 9:58 am today.
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Re: Hydro One IPO

Post by Taggart »

I've treated Hydro One the same as any other IPO I've ever encountered. Not interested.
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Re: Hydro One IPO

Post by SkaSka »

Taggart wrote:I've treated Hydro One the same as any other IPO I've ever encountered. Not interested.
I agree. I was more fascinated by the fact that part of a crown corporation was being sold off to the public and I recalled something I had read from Peter Lynch saying "buy what the Queen is selling."

However, I also recall Benjamin Graham saying "Most new issues are sold under favorable market conditions, which means favorable for the seller and less favorable for the buyer."

I'm left watching with amusement from the sidelines :beer:
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Re: Hydro One IPO

Post by Taggart »

SkaSka,

I let others invest the way the want. Personally, I must have an equity's financial history over at least three to five years. I especially have to know what management's plans are for the dividend. Are they going to grow it or is it going to remain stagnant for the next several years? Without that minimum of info, I tend to move on and look for another Canadian company that I may not purchase right away, but at least put on my watch list.
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Re: Hydro One IPO

Post by nisser »

Apparently the government will still have a large part in running it and nothing that the Ontario's government has run has had any success so I'd stay away.
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Re: Hydro One IPO (H-TSX)

Post by Shakespeare »

This dividend stock offers a defense against market shocks - The Globe and Mail (Behind the G&M paywall)
The first dividend payment is expected to occur in late March. Management has targeted a quarterly dividend of 21 cents a share, or 84 cents annually. This equates to an annualized dividend yield of 3.7 per cent.
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Re: Hydro One IPO (H-TSX)

Post by chufinora »

Shakespeare wrote:Added to finiki on MJSD cycle.
MJSD cycle? Just so you think I am not totally lazy I searched Finiki for MJSD cycle and got nothing.....
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Re: Hydro One IPO (H-TSX)

Post by Shakespeare »

3 Cycle 3: dividends paid in March, June, September, and December

Added: MJSD now searches. So do JAJO and FMAN.
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Re: Hydro One IPO (H-TSX)

Post by JaydoubleU »

It is a Golden Age for utilities,

and with interest rates looking to stay lower for longer, it could continue.
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Re: Hydro One IPO (H-TSX)

Post by Koogie »

JaydoubleU wrote:It is a Golden Age for utilities,
and with interest rates looking to stay lower for longer, it could continue.
Really ? Tell that to my ZUT holding... :rofl:
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Re: Hydro One IPO (H-TSX)

Post by JaydoubleU »

Really ? Tell that to my ZUT holding..
The top two holdings of ZUT, representing about 21% of the fund, are at 52-week highs. FTS (9.82%) and EMA (9.01%) are very close.

How could ZUT not be performing well?

But I apologize--I am off-thread here. ZUT doesn't hold H yet.
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Re: Hydro One IPO (H-TSX)

Post by chufinora »

I just saw Hydro One has made a sizable acquisition, buying US Avista for US$5.3B or US$53 a share.

http://www.ctvnews.ca/business/hydro-on ... -1.3510437

I have mixed feelings about this as I have been a very happy owner of Avista for past 7.5 years which I bought at $20. Whilst the 24% premium is very nice, I will miss the dividend and annual dividend increase, and now have to find something else to buy.
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Re: Hydro One IPO (H-TSX)

Post by jay »

chufinora wrote: 19 Jul 2017 17:23 I just saw Hydro One has made a sizable acquisition, buying US Avista for US$5.3B or US$53 a share.

http://www.ctvnews.ca/business/hydro-on ... -1.3510437

I have mixed feelings about this as I have been a very happy owner of Avista for past 7.5 years which I bought at $20. Whilst the 24% premium is very nice, I will miss the dividend and annual dividend increase, and now have to find something else to buy.
Why not buy Hydro One? it might go on sale tomorrow. I have had an order to buy TSE:H for $20/share for quite some time now and I might adjust it even lower. Wondering if this acquisition is already baked in H's price or we see a nice drop tomorrow.
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Re: Hydro One IPO (H-TSX)

Post by Chuck »

From what I can see Hydro One has a higher dividend yield, so you won't miss the dividends if you roll into H1. Dividend increases OTOH, may be less reliable.
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Re: Hydro One IPO (H-TSX)

Post by kcowan »

They also have a sizable Convertible Debenture IPO at 4% with $21.4 conversion price. I will take a pass.

Here is an analysis of this offering. Seems to be an option to buy the shares if the acquisition is accretive.
Last edited by kcowan on 21 Jul 2017 12:29, edited 1 time in total.
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Re: Hydro One IPO (H-TSX)

Post by chufinora »

Well aside from the fact that my Avista shares are part of my $US portfolio, Hydro One does not appeal to me as a well run company. Their performance metrics/service reliability metrics are very poor compared to other Ontario utilities. Their execs are the highest paid utility execs in Canada (By a big margin). If you are unlucky enough to live on the outskirts of Ottawa and are a Hydro One customer you are being paying pretty much twice as much for your electricity service than your neighbors with Ottawa Hydro. They are just not a well run efficient company IMHO, ultimately that should reflect on their investment performance.
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Re: Hydro One IPO (H-TSX)

Post by adrian2 »

jay wrote: 19 Jul 2017 18:45 Why not buy Hydro One? it might go on sale tomorrow. I have had an order to buy TSE:H for $20/share for quite some time now and I might adjust it even lower. Wondering if this acquisition is already baked in H's price or we see a nice drop tomorrow.
One can always dream of nice sales ahead! :P

Pre-market quotes, usually a decent indication of the open, have H shares up 2 cents at $22.55.
At $20, I would back up the truck.
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Re: Hydro One IPO (H-TSX)

Post by adrian2 »

Day summary:
Open: $21.40
Low: $21.32
High: $22.85
Close: $22.67 up $0.14

Congratulations to those who bought at or near the open!
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Re: Hydro One IPO (H-TSX)

Post by Shakespeare »

Behind the G&M pay wall:

https://www.theglobeandmail.com/investi ... -would-do/
Queen’s Park still controls the largest block of stock and an antagonistic premier could make life very difficult for the company.

This threat of political interference has weighed on the stock, which is down more than 15 per cent from this time last year....

If you own shares, I suggest you hold. Otherwise, stay on the sidelines. There’s a lot of uncertainty surrounding this company, not the least of which is a Doug Ford future.
The possibilityvirtual certainty of political interference was why I didn't buy this stock in the first place.
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