When it comes to finding a growth stock that will explode, it can be tempting to look at the big growth stocks of the day — ones that have already exploded and could keep climbing. But if a company has already exploded, it usually means there isn’t going to be another explosion after that.
That’s why today I’m going to look at a growth stock that’s had a long climb upwards but still has far more room to run. And what’s more, it’s not some tech stock that’s volatile in today’s market. No, the growth stock I want investors to consider is Hydro One (TSX:H).
How far it’s grown
Hydro One stock hasn’t been on the TSX today all that long. Yet in that time, shares of the stock have climbed 64%. I know; there are tech stocks out there that have done that this year. But hear me out.
Hydro One stock remains an incredibly cheap stock in all the right ways. Some of its most telling value attributes are in value territory right now. This includes its price-to-earnings (P/E) ratio, which currently is lower than its five-year average at 21.23 times earnings.
Hydro One stock is also low when it comes to price to sales (P/S). This ratio puts it at 2.78, again in value territory, and its enterprise value over earnings before interest and taxes (EV/EBIT) ratio is 14.10. All these metrics point to the stock being a solid buy right now, which is just what analysts recommend.
Why buy Hydro One stock?
The reason Hydro One stock is such a solid buy right now, despite other analysts placing it as a hold, is it’s been through the rough patches and coming out the other side. Hydro One stock climbed as investors have gotten into utility stocks over the last few years. Yet it then came back to fall after the fall in utility stocks.
It didn’t help that the company was reporting poorer results than normal, as higher costs from inflation and interest rates weighed on the stock. However, that’s why now might be the perfect time to get in on the action.
While shares of Hydro One stock are up over the last few years, it’s down about 10% in the last three months. That marks the stock as a great buy to get in on a dip in share price to watch it during its eventual turnaround.
A strong sector for strong returns
While other investors are seeking out the investment in growth stocks offering shiny tech, smart investors want longevity. That’s why Hydro One stock offers today, as it’s a new company in the stable sector of utilities.
Not only that, it’s a solid option thanks to its industry and backing. The company invests in renewable energy assets, namely hydro. This is an expanding operation that will only grow more as the world shifts to renewable energy. Furthermore, the company is backed by the province of Ontario, which holds a major stake. Therefore, it has consistent cash flow coming in from the province, with more through investments.
Hydro One stock could rebound significantly quickly, given that earnings are due on Aug. 9! Certainly keep your eye on this stock for the near future. As it turns around, it could provide investors with a major source of income. One that could see shares rise 10 times over the next 10 years.
