Emera Inc.

Sound bite for Twitter and StockTwits is: Dividend growth utility. There is insider buying and most of it was at recent low. Stock price is from cheap to reasonable and below the median. I worry about their debt load. See my spreadsheet on Emera Inc.

I own this stock of Emera Inc. (TSX-EMA, OTC-EMRA). I found this company in Mike Higg's site. Mike's site has a spreadsheet showing Dividend Paying Canadian Growth stocks. It is currently on the TMX Canadian Dividend Aristocrats Index.

Debt is still too high. The Long Term Debt/Market Cap Ratio is 1.22. This is down from 1.55 of last year. Long Term Debt is down by 11% from last year also. This is the second year with this ratio being very high. Liquidity Ratio is just 0.64. If this ratio is below 1.00 it means that current assets cannot cover current liabilities. Even with Cash Flow less Dividends added in the ratio is just 0.82. This is the second year of very low Liquidity Ratios.

The problem with high debt ratios can make a company vulnerable in a recession. You never know when the next one will occur.

Dividend growth used to be low with the 15, 20 and 24 years dividend growth at 6.24%, 4.96% and 4.45% per year. Dividend increases have been getting higher, with the dividend growth over the past 5 and 10 years at a moderate level of 9.37% and 9.01% per year over the past 5 and 10 years. The last dividend increase was in 2018 and it was for 10%. This would imply that the company feels good about their future prospects.

The dividends on this stock have always been in the good range. The historical median dividend yield is 4.77% with 5 and 10 year median dividend yields at 4.28% and 4.26%. The current dividend yield is even higher with a yield of 5.46%.

Long term returns on this stock have been quite good. The 5, 10, 15, 20 and 25 year total returns are at 10.59%, 12.49%, 12.06%, 9.03% and 11.16% per year. The portion of this total return attributable to dividends is 4.36%, 4.55%, 4.60%, 3.97%, and 5.08%. The portion of this total return attributable to capital gains is 6.22%, 7.94%, 7.46%, 5.06% and 6.08%.

I have held this stock for almost 16 years. My total return is 12.10% per year with 7.31% from capital gains and 4.79% from dividends. I made dividends of $12.20 per share and they have paid 47% of the cost of my stock. For the stock I bought in 2005 I am earning 11.93% yield on my original cost.

The 5 year low, median and high median Price/Earnings per Share Ratios are 17.66, 20.13 and 22.60. The 10 year corresponding ratios are 14.45, 16.70 and 19.38. The historical P/E Ratios are 13.41, 15.36 and 17.08. This 10 year and historical ones seem the most reasonable for the utility. The current P/E Ratio is 15.67 based on a stock price of $41.37 and 2018 EPS ratio of $2.64. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a Graham Price of $40.70. The 10 year low, median and high median Price/Graham Price Ratios are 1.11, 1.28 and 1.44. The current P/GP Ratio is 1.02 based on a stock price of $41.37. This stock price testing suggests that the stock price is relatively cheap.

I get a Price/Book Value per Share Ratio of 1.84. The current P/B Ratio is 1.48 based on Book Value of $6,380M, Book Value per Share of $27.89 and a stock price of $41.37. The current P/B Ratio is some 19.5% below the 10 year median ratio. This stock price testing suggests that the stock price is reasonable and below the median. If the current P/B Ratio was 20% below the 10 year median the stock price would be considered cheap.

The historical median dividend yield is 4.77%. The current dividend yield is 5.46% based on a stock price of $41.37 and dividends of $2.26. The current dividend yield is some 14.5% higher than the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

The 10 year median Price/Sales (Revenue) Ratio is 1.90. The current P/S Ratio is 1.30 based on 2018 Revenue estimate of $7,254M, Revenue per Share of $31.71 and a stock price of $41.37. The current P/S Ratio is some 31% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at analysts' recommendations I find Buy (7), Hold (4) and Underperform Recommendations (2). The consensus would be a Hold. The 12 month stock price is $50.38. This implies a total return of 27.24% with 21.78% from capital gains and 5.46% from dividends.

Kay Ng of Motley Fool thinks it is time to buy this stock. Emera reported via Business Wire highlights from their fourth quarter of 2017. See what analysts are saying about this stock on Stock Chase. Analysts have various views and some worry about utilities being affected by rising interest rates.

Emera Inc. is an energy and services company. The company invests in electricity generation, transmission and distribution as well as gas transmission and utility energy services. Its web site is here Emera Inc.

The last stock I wrote about was about was IGM Financial (TSX-IGM, OTC-IGIFF)... learn more. The next stock I will write about will be Home Capital Group (TSX-HCG, OTC-HMCBF)... learn more on Wednesday, February 21, 2018 around 5 pm. Tomorrow on my other blog I will write about Canadian Market.... learn more on Tuesday, February 20, 2018 around 5 pm.

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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