Emera Inc

I am reviewing this stock (TSX-EMA) today as the annual reported for December 2009 has been published and this is a stock that I own. I bought some shares in this company in 2005 and my total return to date has been 10% per year. This is a utility stock that pays a good dividend that averages around 4.5%. They have just declared a dividend increase of over 9%.

When you look at the growth figures to date, they are mixed bag. The 5 and 10 year growth figures are rather low at 3.7% per year and 6% per year respectively. However, for the year ending in 2009, the revenue increased some 10%. The earnings growth shows the same sort of results with the 5 and 10 year growth figures being 5.5% per year and 2.7% per year respectively, but for the year ending in 2009, the earnings increase a very healthy 20%.

The dividend increases are rather low and sort of keep up with inflation. The 5 and 10 year growth figures are 3.2% per year and 1.7% per year. Generally speaking, higher the dividend yield, the lower the dividend increases are. When you get a nice yield like 4.5% like on this stock, you expect the increases to keep level approximately with inflation. The very good figures on this stock are the 5 and 10 year growth figures for total return and they are 9.8% per year and 10.6% per year, respectively.

Moving on to the balance sheet, I find that the asset/liability ratios are a bit low. The Liquidity Ratio is just 0.89 and the Asset/Liability Ratio is 1.40. However, in the case of current liabilities, they do have enough cash flow to pay for them. When I look at the Return on Equity, this company’s results are good with the 5 year average ROE being at 10.2% and the ROE for 2009 being at 11.7%.

I am happy with my current investment in this stock and I intend to hold what shares I have. Tomorrow I will look and see what the analyst say about this stock.

Emera Inc. is an energy and services company that has two wholly-owned regulated electric utility subsidiaries, of Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Emera also owns 19% of St. Lucia Electricity Services Limited, and 25% of Grand Bahamas Power Company that serves 19,000 customers on the Caribbean island of Grand Bahamas. Emera also owns the Brunswick Pipeline; Bayside Power, in Saint John, New Brunswick; Emera Energy Services; a joint venture interest in Bear Swamp northern Massachusetts; a 12.9% interest in the Maritimes & Northeast Pipeline; and an 8.2% interest in Open Hydro. Its web site is www.emera.com/. See my spreadsheet at www.spbrunner.com/stocks/ema.htm .

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html. Follow me on twitter.