I own this stock of Emera Inc. (TSX-EMA, OTC- EMRAF). I found this company in Mike Higgs' site for Dividend Paying Canadian Growth stocks. In 2005, I want to buy something for my Locked in RRSP. I think that this was an appropriate stock and has good value. I was using up excess cash in my account. I bought more in 2011.
This stock has a moderate dividend yield and moderate dividend increases. The current dividend yield is 3.68% and the 5 year median dividend yield is 4.22%. The dividends have increased by 7.5% and 5.3% per year over the past 5 and 10 years. The last dividend increase was in 2015 and the increase was for 3.2%. However this latest increase was after a 6.9% increase in quarter three of 2014.
For the stock I bought in 2005, which was 10 years ago I am making a dividend yield on my original purchase price of 8.4%. For the stock I bought in 2011, which was 4 years ago, I am making a dividend yield of 5.5% on my original purchase price.
Another way to look at the dividends is that my adjusted cost basis is $25.95 per share. I have received dividends of $6.41 per share. Therefore dividends have paid almost 25% of the cost of my shares.
Outstanding shares have increased by 5% and 2.8% per year over the past 5 and 10 years. Shares have increased due to stock options, DRIP, Employee Purchase Plan and Share Issues. Because of the increase in shares, you want to look at per share values, like Revenue per Share and Earnings per Share.
Revenue is up by 15.2% and 9.3% per year over the past 5 and 10 years. Revenue per Share is up by 9.8% and 6.3% per year over the past 5 and 10 years. If you just look at revenue it growth is good over the past 5 and 10 years. But if you look at Revenue per Share, the growth is moderate to good.
Growth in EPS is good over the past 5 and 10 years at 13.2% and 9.3% per year. CFPS is moderate to good with growth at 11.5% and 6.4% per year over the past 5 and 10 years.
The Liquidity Ratio is generally low and they generally need to use cash flow to cover current liabilities. The current Liquidity Ratio at 1.27 is better than the 5 year median of 1.13. When you add in cash flow after dividends the ratio goes to 1.75. There is a portion of current long term debt in with the current liabilities. If you exclude that the Liquidity Ratio is 1.39. If you add in cash flow after dividends, the ratio is 1.91.
The Debt Ratio has varied over time. Currently it is quite good at 1.97. However, the 5 year median is a bit low at 1.43. The Leverage and Debt/Equity Ratios are high at 5.23 and 2.65. However, these ratios are not abnormal for a Utility stock.
The Return on Equity has been below 10% twice in the past 10 years and no times in the past 5 years. The ROE for 2014 was 21.6% and the 5 year median is 13.3%. The ROE on Comprehensive Income has been higher and lower than the ROE on Net Income. In 2014 the ROE on Comprehensive Income was even higher than that on Net Income and was 25.8%. However, the 5 year median ROE on Comprehensive Income at 13.1% is close to the 5 year median of the ROE on Net Income. So overall, the ROE on Net Income and Comprehensive Income are close so this is good.
Sound bite for Twitter and StockTwits is: Dividend Growth Utility Stock. Initially after my first purchase the stock just went down. However, I have done well to date on this stock with total returns of $14.14% and with 9.81% per year from capital gains and 4.33% per year from dividends. See my spreadsheet at ema.htm.
This is the first of two parts. The second part will be posted on Friday, February 20, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.
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 here Emera.
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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. Follow me on Twitter or StockTwits.
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