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Hellenic Telecommunications Organization S.A.'s (ATH:HTO) Recent Stock Performance Looks Decent- Can Strong Fundamentals Be the Reason?

Simply Wall St · 3d ago

Hellenic Telecommunications Organization's (ATH:HTO) stock up by 4.8% over the past month. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. Particularly, we will be paying attention to Hellenic Telecommunications Organization's ROE today.

Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.

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How To Calculate Return On Equity?

Return on equity can be calculated by using the formula:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Hellenic Telecommunications Organization is:

28% = €569m ÷ €2.1b (Based on the trailing twelve months to September 2025).

The 'return' refers to a company's earnings over the last year. That means that for every €1 worth of shareholders' equity, the company generated €0.28 in profit.

Check out our latest analysis for Hellenic Telecommunications Organization

What Is The Relationship Between ROE And Earnings Growth?

Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.

A Side By Side comparison of Hellenic Telecommunications Organization's Earnings Growth And 28% ROE

First thing first, we like that Hellenic Telecommunications Organization has an impressive ROE. Secondly, even when compared to the industry average of 11% the company's ROE is quite impressive. This probably laid the groundwork for Hellenic Telecommunications Organization's moderate 10% net income growth seen over the past five years.

We then performed a comparison between Hellenic Telecommunications Organization's net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 10% in the same 5-year period.

past-earnings-growth
ATSE:HTO Past Earnings Growth December 11th 2025

Earnings growth is a huge factor in stock valuation. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. What is HTO worth today? The intrinsic value infographic in our free research report helps visualize whether HTO is currently mispriced by the market.

Is Hellenic Telecommunications Organization Efficiently Re-investing Its Profits?

The high three-year median payout ratio of 62% (or a retention ratio of 38%) for Hellenic Telecommunications Organization suggests that the company's growth wasn't really hampered despite it returning most of its income to its shareholders.

Besides, Hellenic Telecommunications Organization has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 52%. As a result, Hellenic Telecommunications Organization's ROE is not expected to change by much either, which we inferred from the analyst estimate of 26% for future ROE.

Summary

Overall, we are quite pleased with Hellenic Telecommunications Organization's performance. In particular, its high ROE is quite noteworthy and also the probable explanation behind its considerable earnings growth. Yet, the company is retaining a small portion of its profits. Which means that the company has been able to grow its earnings in spite of it, so that's not too bad. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.