Is it a good company at a reasonable price? I realized this stock is high dividend and low growth, but I have it for diversification and I think a dividend portfolio like mine, you probably need companies with low dividends and high growth, but also ones with high dividends and low growth. Since we are in uncertain times and the TSX index is off its highs of earlier this year, I would suggest that only buy stocks that are relatively cheap. I am not going to sell this stock. I will not be buying either because I do have enough of it. This stock is currently testing as reasonable.
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. I first bought this stock in 2005, as I wanted 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.
When I was updating my spreadsheet, I noticed that a number of insiders who are employees are buying shares. There is only one director that I am following that is buying. I have done well with this stock. I first bought it in 2005 and then made several other purchases over the past 20 years. My total return is 10.68% with 5.16% from capital gains and 5.52% from dividends.
If you had invested in this company in December 2014, for $1,004.64 you would have bought 26 shares at $38.64 per share. In December 2024, after 10 years you would have received $619.84 in dividends. The stock would be worth $1,396.98. Your total return would have been $2,016.82. This would be a total return of 8.58% per year with 3.35% from capital gain and 5.22% from dividends. This is a utility so you would expect a large portion of the return to be in dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $38.64 | $1,004.64 | 26 | 10 | $619.84 | $1,396.98 | $2,016.82 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.98%. The 5, 10 and historical dividend yields are also moderate at 4.80%, 4.74% and 4.79%. The dividend growth is low (below 8% per year) at 3.9% per year over the past 5 years. The last dividend increase was in 2024 and it was for 1%.
The Dividend Payout Ratios (DPR) are generally high, with the DPR for CFPS is fine. The DPR for 2024 for Earnings per Share (EPS) is too high at 168% with 5 year coverage at 92%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is too high at 98% with 5 year coverage at 92%. The DPR for 2024 for dividends paid in Cash (against Net Income) is too high at 109% with 5 year coverage better at 68%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 39% with 5 year coverage a little too high at 44%. The DPR for 2024 for Free Cash Flow 1 (FCF) is non-calculable due to negative FCF. The DPR for 2024 for Free Cash Flow 2 (FCF) is good at 32% with 5 year coverage at 47%. Obviously, there are big differences in what different people think the FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 168.27% | 91.79% |
| AEPS | 97.87% | 91.79% |
| Div Pd Cash | 108.91% | 67.84% |
| CFPS | 38.81% | 43.69% |
| FCF 1 | 0.00% | -43.70% |
| FCF 2 | 32.20% | 46.93% |
Debt Ratios are shows that the company has a lot of debt, however, most utilities do. The Long Term Debt/Market Cap Ratio for 2024 is currently too high at 1.14 and currently at 1.05, but this has often been high. The Liquidity Ratio for 2024 is too low at 0.72 and 0.72 currently. If you added in Cash Flow after dividends, the ratios are still too low at 1.07 and currently at 1.00. I prefer this ratio be 1.50 or higher. The Debt Ratio for 2024 is too low at 1.45 and 1.45 currently. I prefer this ratio be at 1.50 or higher. The Leverage and Debt/Equity Ratios for 2024 are too high at 3.62 and 2.50 and currently at 3.60 and 2.50.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 1.14 | 1.05 |
| Intang/GW | 0.37 | 0.34 |
| Liquidity | 0.72 | 0.72 |
| Liq. + CF | 1.07 | 1.00 |
| Debt Ratio | 1.45 | 1.45 |
| Leverage | 3.62 | 3.62 |
| D/E Ratio | 2.50 | 2.50 |
The Total Return per year is shown below for years of 5 to 32 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 3.91% | 4.11% | -0.75% | 4.86% |
| 2014 | 10 | 6.91% | 8.58% | 3.35% | 5.22% |
| 2009 | 15 | 7.09% | 10.60% | 5.21% | 5.39% |
| 2004 | 20 | 6.10% | 10.34% | 5.27% | 5.07% |
| 1999 | 25 | 5.10% | 10.62% | 5.41% | 5.22% |
| 1994 | 30 | 4.54% | 10.90% | 5.35% | 5.55% |
| 1992 | 32 | 4.43% | 10.69% | 5.16% | 5.54% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 16.26, 17.25, and 18.23. The corresponding 10 year ratios are 15.91, 17.81 and 19.70. The corresponding historical ratios are 13.58, 15.52 and 17.19. The current P/E Ratio is 17.73 based on a stock price of $58.20 and EPS estimate for 2025 of $3.28. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 15.88, 19.13 and 20.23. The corresponding 10 year ratios are 16.23, 18.24 and 20.08. The current P/AEPS Ratio is 17.91 based on AEPS estimate for 2025 of $3.25 and a stock price of $58.20. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/Adjusted Funds from Operations Ratios are 16.37, 19.84 and 23.31. The corresponding 10 year ratios are 14.41, 15.41 and 16.01. The current P/AEPS Ratio is 12.15 based on AFFO estimate for 2025 of $4.79 and a stock price of $58.20. This ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $54.12. The 10-year low, median, and high median Price/Graham Price Ratios are 1.00, 1.12 and 1.22. The current ratio 1.08 based on a stock price of $58.20. This ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.59. The current ratio is 1.45 based a Book Value of $11,855M, Book Value per Share of $40.06 and a stock price of $58.20. The current ratio is 8.8% below the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share estimate for 2025 of $41.08. They calculate the Book Value differently than I do and their 10-year median Price/Book Value per Share Ratio of 1.42. A stock price of $58.20 implies a P/B Ratio of 1.42 and a Book Value of $12,157M. The current ratio is at the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 8.24. The current P/CF Ratio is 7.50 based on Cash Flow per Share estimate for 2025 of $7.76, Cash Flow of $$2,297M and a stock price of $58.20. The current ratio is 9% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 4.79%. The current dividend yield is 4.98% based on dividends of $2.90 and a stock price of $58.20. The current yield is 4% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10 year median dividend yield of 4.74%. The current dividend yield is 4.98% based on dividends of $2.90 and a stock price of $58.20. The current yield is 5% above the 10 year 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 2.09. The current P/S Ratio is 2.09 based on Revenue estimate for 2025 of $8,225, Revenue per Share of $27.79 and a stock price of $58.20. The current ratio is at the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and at the median.
Results of stock price testing is that the stock price is relatively reasonable. The dividend yield tests show that the stock price is reasonable and below the median. The reasonable stock price is confirmed by the P/S Ratio test. Most of the rest of the testing is also showing that the stock price is reasonable.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (4), Hold (6), Underperform (1), and Sell (1). The consensus would be a Hold. The 12 month stock price consensus is $57.54 with a high of $63.00 and a low of $50.00. The consensus price implies a total return of 3.83% with a capital loss of 1.13% and dividends of $4.98% based on a current stock price of $58.20.
The two recommendations in 2025 on Stock Chase are buys. One analyst says utilities are always levered. Stock Chase gives this stock 5 stars out of 5. An analyst in November 2024 gave it a hold because he said it has enduring issues now. Most analysts in 2024 gave it a Buy. One said sell because he prefers growth to high dividends. Daniel Da Costa Motley Fool says he likes Fortis to Emera as Fortis has increased dividends for 51 straight years and Emera for only last 17. I have data for Emera going back 31 years and they had increases in 29 of those years. He gives other reasons for liking Fortis better. (I have both stocks.) Brian Paradza on Motley Fool thinks this stock is a gem. He says that overlooking steady, cash-generating utility stocks could mean missing out on a rare combination of stability, income, and growth. The company put out a Press Release about their fourth quarter of 2024.
Simply Wall Street via Yahoo Finance talks about the company missing revenue and earnings estimates. Simply Wall Street via Yahoo Finance say they are worried about the high dividend payout ratios. Simply Wall Street lists 3 warnings of interest payments are not well covered by earnings; dividend of 4.93% is not well covered by earnings or free cash flows; and profit margins (6.9%) are lower than last year (12.9%). Simply Wall Street gives this stock one and one half stars out of 5.
Emera is a geographically diverse energy and services company investing in electricity generation, transmission, and distribution as well as gas transmission and utility energy services. Emera has operations throughout North America and the Caribbean countries. Its web site is here Emera Inc.
The last stock I wrote about was about was TFI International Inc (TSX-TFII, OTC-TFIFF) ... learn more. The next stock I will write about will be Bombardier Inc (TSX-BBD.B, OTC-BDRBF) ... learn more on Monday, March 10, 2025 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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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