After becoming the third largest global listing in 2023 and an impressive evolution, especially during the first 5 months after becoming public, Hidroelectrica shares are currently one of the most popular among Romanian investors and top-performing international funds. While you can buy H2O shares directly, sometimes it is worth considering an ETF with H2O representation.
Hidroelectrica is the largest electricity producer in Romania and the main provider of technological services required in the Romanian National Energy System. In an average hydrological year, the company provides 30% of the total national electricity production.
The company became public on 12 July 2023 at the Bucharest Stock Exchange. Romania's leading energy producer made its debut on the stock exchange following the largest initial public offering in the history of the Romanian stock exchange.
iShares MSCI Frontier and Select EM ETF (FM), managed by Blackrock, the world's largest asset manager, is currently holding 343,937.00 Hidroelectrica shares, meaning 2,31% weight in the fund. The total weight of Romanian companies in the largest fund dedicated to Emerging and Frontier Markets is around 10%.
Hidroelectrica Stock (BSE: H2O) - Research and Ratings
- Is Hidroelectrica stock undervalued compared to its fair value, analyst forecasts, and price relative to the market?
- What is the analyst 12-month H2O shares price forecast?
- What are H2O’s future growth expectations?
- How has Hidroelectrica stock performed over the past 5 years?
- Should you buy Hidroelectrica shares or invest in ETFs with H2O representation?
Understanding Hidroelectrica Stock (BSE: H2O): A brief history
- In 1990 was founded RENEL, the successor of the Ministry of Electric Energy.
- In 1998, the energy sector was reorganized by creating (according to GD 365) a holding company, CONEL, with four subsidiaries: Termoelectrica, Electrica, Hidroelectrica, Nuclearelectrica. In 2000 these four companies became, through Government Decision 627, 100% state-owned companies.
- In 2002 Hidroelectrica was reorganized into eight service and maintenance companies.
- In 2014, Hidroelectrica ended its annual financial year with the highest turnover in the company's history, RON 3.4 billion, the highest profit ever recorded, RON 1.2 billion, and the lowest production price in the last 5 years - RON 108/MWh.
- In 2017, the company records historical results: turnover of 3.254 billion lei, net profit of 1.603 billion lei and EBITDA of 69%.
Hidroelectrica shares are distributed among 3 categories:
- The ROMANIAN STATE through Ministry of Energy - 80,0561 %
- Legal Entities - 16,3137 %
- Individuals - 3,6302 %
Hidroelectrica Stock (BSE: H2O)- Fundamental Analysis and Financial Ratings
See the latest Hidroelectrica stock price analysis, including valuation, future growth, past performance, and more to help you make more informed investing decisions.
Valuation
Are Hidroelectrica shares undervalued compared to their fair value, analyst forecasts, and its price relative to the market?
- H2O (RON132) is trading below simplywall.st estimate of fair value (RON176.66) by more than 20%.
- H2O is good value based on its Price-To-Earnings Ratio (9.3x) compared to the peer average (21.3x).
- H2O is good value based on its Price-To-Earnings Ratio (9.3x) compared to the European Renewable Energy industry average (16.3x).
- H2O is expensive based on its Price-To-Earnings Ratio (9.3x) compared to the estimated Fair Price-To-Earnings Ratio (8.7x).
Future Growth
Hidroelectrica's revenue and earnings are forecast to decline at 4.2% and 3.7% per annum respectively. EPS is expected to decline by 13.5% per annum. Return on equity is forecast to be 17.7% in 3 years.
- H2O's earnings are forecast to decline over the next 3 years (-3.7% per year).
- H2O's revenue is forecast to decline over the next 3 years (-4.2% per year).
- H2O's Return on Equity is forecast to be low in 3 years time (17.7%).
- Analyst's coverage is Good.
Past Performance
S.P.E.E.H. Hidroelectrica has been growing earnings at an average annual rate of 26%, while the Renewable Energy industry saw earnings growing at 31.2% annually. Revenues have been growing at an average rate of 22.5% per year. S.P.E.E.H. Hidroelectrica's return on equity is 25.4%, and it has net margins of 52.3%.
- H2O has high quality earnings;
- H2O's current net profit margins (52,3%) are higher than last year (47.2%);
- H2O's earnings have grown significantly by 26.% per year over the past 5 years;
- H2O's earnings growth over the past year (42,6%) exceeds its 5-year average (26% per year);
- H2O earnings growth over the past year (42,6%) exceeded the Renewable Energy industry 14.7%;
- H2O's Return on Equity (25,4%) is considered high.
Financial Health
What is Hidroelectrica's financial position?
S.P.E.E.H. Hidroelectrica has a total shareholder equity of RON25.0B and total debt of RON393.5M, which brings its debt-to-equity ratio to 1.6%. Its total assets and total liabilities are RON29.1B and RON4.1B respectively. S.P.E.E.H. Hidroelectrica's EBIT is RON7.4B making its interest coverage ratio -26.8. It has cash and short-term investments of RON4.8B.
- H2O's short-term assets (RON8.0B) exceed its short-term liabilities (RON1.1B);
- H2O's short-term assets (RON8.0B) exceed its long-term liabilities (RON3.0B);
- H2O has more cash than its total debt;
- H2O's debt to equity ratio has increased from 0.7% to 1.6% over the past 5 years.
- H2O's debt is well covered by operating cash flow (1378.4 %);
- H2O earns more interest than it pays, so coverage of interest payments is not a concern.
Dividend
Hidroelectrica is a dividend paying company with a current yield of 7.33% that is well covered by earnings.
- Too early to evaluate whether H2O's dividend payments have been stable or the potential to increase as they only just started paying a dividend;
- Hidroelectrica's dividend (7.33%) is higher than the bottom 25% of dividend payers in the RO market (2.24%);
- H2O's dividend (7.33%) is in the top 25% of dividend payers in the Romanian market (6.71%);
- With its reasonable payout ratio (72.3%), H2O's dividend payments are covered by earnings;
- With its high cash payout ratio (83.1%), H2O's dividend payments are not well covered by cash flows.
Hidroelectrica Stock Price Forecast - Should You Buy Hidroelectrica Shares?
What is the analyst 12-month H2O shares price forecast, and do we have any statistical confidence in the consensus price target from analysts?
Source: simplywall.st
According to simplywall.st analyst forecast, average 1 year price target (RON 123,84) is 6,2% lower than current share price (RON132.00).
According to tradingview.com, the 9 analysts offering 1 year price forecasts for Hidroelectrica stock have a maximum estimate of 145.00, a average estimate of 125,7 and a minimum estimate of 95.00.
Source: investing.com
Investing.com analysts' 12-Month Price High Target is 144.90 RON, while the Average and Low Price targets are 126.74, respectively 115.00.
There are no 5-year Hidroelectrica shares price forecasts and price predictions.
Important: When considering H2O's fundamental analysis, financial rating and price predictions, it’s important to remember that high market volatility and changing economic environment makes it difficult to give long-term estimates. As such, analysts and algorithm-based platforms can and do get their ratings and predictions wrong. Always do your own research before making an investment decision. And never trade or invest more than you can afford to lose.
Hidroelectrica Stock Price Analysis
Technically, Hidroelelctrica shares price is currently consolidating after it failed to make a higher high while recovering the bearish correction. This could signal a weakness for the bulls, which means that 135.00 area could be a critical one in price evolution.
Source: bvb.ro
The bullish scenario depends on the bulls’ capacity to push the price to a new high, while a bearish follow up should come up with a breakdown below 130.00 and lower 126.00.
How to Invest in Hidroelectrica Stock
Some investors want to take an active hand in managing their investments, while others prefer to set it and forget it. Your preference may change but decide on an approach to get started.
For most people, stock market investing means choosing among these two investment types:
Buy Hidroelectrica Shares
If you’re after a specific company, you can buy a single share or a few shares to dip your toe into the stock-trading waters. Building a diversified portfolio out of many individual stocks is possible, but it takes significant investment and research.
If you go this route, remember that individual stocks will have ups and downs. If you research a company and choose to invest in it, think about why you picked that company in the first place if jitters start to set in on a down day.
Traditional stockbrokers allow you to invest in local stocks. However, you might not be able to invest in international stocks listed on the major stock exchanges, global ETFs, and other assets.
Buy or Trade ETFs with Hidroelectrica Holdings
Hidroelectrica stock (or any single stock, for that matter) can have an unpredictable and dynamic evolution. You can manage the risk you see extreme highs and lows by diversifying your investment holdings. An ETF, for instance, contains a basket of individual stocks. When you invest in a fund, you also own small pieces of each of those companies.
If you want an ETF with H2O representation, you might consider iShares MSCI Frontier and Select ETF. BlackRock's iShares is the largest provider of ETFs as calculated by assets under management.
Why invest in Hidroelectrica Shares via FM?
With net assets of almost $450M, The iShares MSCI Frontier and Select EM ETF (FM) is the largest exchange-traded-fund that seeks to track the investment results of an index composed primarily of frontier market equities along with select emerging market equities.
- Exposure to frontier market stocks and smaller size emerging market stocks with an emphasis on tradability and investability of the underlying constituents
- One-click access to a virtually untapped investment portfolio with a Bucharest Stock Exchange and BET index exposure.
- Use to seek long-term growth and diversification.
How to Get Started with CAPEX.com
Here is how to buy and trade stocks, ETFs and other assets with an international, highly regulated broker like CAPEX.com:
- Choose which type of account you want to use. Your first concern should be your risk appetite and time horizon. If you want to buy and hold shares, open an Invest account. If you want to speculate on price movements (including falling prices) with zero commission and leverage, open a CFD trading account.
- Create an account. Regardless of your chosen account, you need to register and complete the KYC process to verify your identity.
- Fund your account with fiat money. Before buying and trading stocks and ETFs, you need to fund your exchange account with U.S. dollars, Euros, or other currencies.
- Place your order. Click on the "Search" icon located in the left panel or by clicking on "ETFs" and then select the instrument, such as "iShares MSCI Frontier and Select EM ETF”.
When trading stocks, the CFDs (contracts for difference) are stored in your account and are more liquid than the underlying asset.
However, you should be aware that CFD trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading CFDs. There are margins you need to maintain; if you cannot cover reductions in values, your position might be closed, and you'll have to meet the loss no matter what subsequently happens to the underlying asset.
With CAPEX, you can trade CFDs on +2.000 stocks and invest in +5.000 stocks and ETFs with ownership.
Free resources
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Sources:
https://bvb.ro/FinancialInstruments/Details/FinancialInstrumentsDetails.aspx?s=H2O
https://simplywall.st/stocks/ro/utilities/bvb-h2o/speeh-hidroelectrica-shares
https://www.investing.com/equities/societatea-de-producere-a-energiei-consensus-estimates
https://www.tradingview.com/symbols/BVB-H2O/forecast/
https://www.hidroelectrica.ro/