Emera Inc.

Sound bite for Twitter and StockTwits is: Bit expensive. I think that the new purchase is a positive. They expect this purchase to add to their earnings and dividends growth. See my spreadsheet on Emera Inc.

I own this stock of Emera Inc. (TSX-EMA, OTC-EMRAF). I found this company in Mike Higg's site. Mike's site has a spreadsheet showing Dividend Paying Canadian Growth stocks. In 2005, I wanted to buy something for my Locked in RRSP. I was using up excess cash in my account.

I have had this stock for 10 and one half years. I have made a total return of 13.71% per year with 9.43% per year from capital gains and 4.28% per year from dividends. So far some 31% of stock price has been paid for with dividends. On the stock I bought in 2005, I am earning a yield of 10% on my original investment.

Dividends are good and dividend growth is moderate. The current dividend yield is 4.1% and the 5 year median dividend yield is 4.2%. This historical median dividend yield is 4.8%. The 5 and 10 year growth in dividends is at 7.4% and 6.5% per year. The last dividend increase was in 2015 and the increase was for 18.8%.

If you start from today with the dividend yield at 4.1% and with a 7.4% dividend growth and if you buy this stock today, in 5, 10 or 15 years' time you would earning 5.85%, 8.35% or 11.94% on your stock purchase.

This company can afford their dividends. The Dividend Payout Ratio for EPS for 2015 was 61%. The 5 year median is 67%. The DPR for CFPS for 2015 was 32% and the 5 year median is at 32%.

Growth in Revenue, Cash Flow and Earnings is moderate to good. Outstanding share have grown by 5 and 3% per year over the past 5 and 10 years, so per share values are the important ones. For example, Revenue has grown by 12.4% and 9.1% per year over the past 5 and 10 years. Revenue per Share has grown at 6.9% and 6% per year over the past 5 and 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 14.34, 15.88 and 17.42. The 10 year corresponding P/E Ratios are similar at 14.31, 16.26 and 18.06. The current P/E Ratio is 19.19 based on a stock price of $46.45 and 2016 EPS estimate of $2.42. This stock price testing suggests that the stock is a little expensive.

I get a Graham Price of $35.93. The 10 years Price/Graham Price Ratios are 0.96, 1.13 and 1.26. The current P/GP Ratio is 1.29 based on a stock price of $45.45. This stock price testing suggests that the stock is a little expensive.

When I look at analysts' recommendations, I find Buy, Hold and Underperform recommendations. Most of the recommendations are split evenly between Buy and Hold. The consensus recommendations would be a Hold recommendation. The 12 month stock price is $50.29. This implies a total return of 12.36% with 4.09% from dividends and 8.27% from capital gains.

Doug Watt of Motley Fool talks about the impact of Emera's purchase of Teco. The Vista Voice has an article on this stock about analysts recommendations. Note that the price objective listed for Scotiabank etc. in the $30 range must be in US$ not CDN$. US sites often get their currency confused on Canadian stocks. The Investment Reporter talks about Emera being one of their Key Stocks.

I will have only one entry for this stock this year. However, I did a more complete report on this company in 2015 and you can see those reports here and here.

On my other blog I wrote yesterday about Stocks for the Long Run. The next stock I will write about will be Goodfellow Inc. (TSX-GDL, OTC-GFELF)... learn more on Monday, February 22, 2016.

Emera Inc. is geographically diverse energy and services company headquartered in Halifax, Nova Scotia. The company invests in electricity generation, transmission and distribution, as well as gas transmission and utility energy services. Emera has investments throughout northeastern North America, and in four Caribbean countries. Its web site is here Emera Inc.

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.

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