You don’t need thousands of dollars to start investing. Sometimes, all it takes is a bit of curiosity, a smart pick, and maybe $300. And if you’re looking for a Canadian stock that offers stability, growth potential, and passive income, Hydro One (TSX:H) is a top contender right now.
The stock
Hydro One might not be flashy. It’s not a tech rocket or a cannabis wild card. What it is, though, is reliable. It keeps the lights on, literally, for much of Ontario. The Canadian stock transmits and distributes electricity to nearly 1.5 million customers across the province. That kind of consistent demand doesn’t vanish in a recession or slow when interest rates rise. People still charge their phones, run their dishwashers, and turn up the heat in winter. And that’s what makes Hydro One such an attractive option for a long-term investor, especially if you’re just getting started with a smaller amount.
With a share price of around $53 as of writing, your $300 could pick up just over five shares. That might not sound like much, but it’s a foundation. You’d also earn a dividend while you hold it. Hydro One currently pays $1.26 per share annually, which translates to a yield of about 2.4%. That might not make you rich overnight, but if reinvested over time, it adds up. And with consistent dividend hikes in recent years, there’s a good chance that the payout will grow.
The numbers
The Canadian stock’s latest earnings tell a story of steady growth. For the trailing 12 months, Hydro One pulled in $8.48 billion in revenue, with net income reaching $1.16 billion. That gives it earnings per share of $1.93. Profit margins are healthy, sitting at around 13.6%. The Canadian stock isn’t stretching itself too thin, either. Its dividend payout ratio is just under 65%, which means it’s paying shareholders but still keeping enough cash to reinvest in its massive infrastructure network.
In terms of market value, Hydro One is no small fry. It boasts a market cap of $31.7 billion, which reflects the trust investors place in the utility. Its beta sits at 0.37, which tells us it doesn’t bounce around as wildly as the rest of the market. That’s a good thing when you’re looking for a calm, dependable stock to ride out choppy economic waters.
Stability and growth
So, why now? For one, the demand for reliable, regulated income is rising. Interest rates may stay higher for longer, but as inflation eases, solid dividend stocks like Hydro One start to look more attractive. And with so much uncertainty still swirling around global markets, investing in a Canadian stock that provides an essential service in Canada’s largest province feels like a sensible move.
Another reason to like Hydro One right now is its long-term focus. It’s investing in the grid, modernizing infrastructure, and preparing for the future of electrification. As electric vehicles grow in popularity and energy demand rises from industries and homes alike, Hydro One is in a prime position to benefit. It doesn’t need explosive growth to succeed, just steady, regulated expansion. That’s the beauty of a utility.
Bottom line
If you’re planning to tuck this investment into a Tax-Free Savings Account, the dividends and capital gains will be tax-free. That’s a win. And starting small, just $300, is still starting. You don’t need to time the market perfectly. You just need to pick great companies and give them time. In short, Hydro One is boring in the best way possible. It powers the province, pays a steady dividend, and keeps its finances in check. It’s not going to triple overnight, but that’s not the point. If you want to plant a seed and watch it grow into something dependable, this is a great place to begin.
