Is it a good company at a reasonable price? I still like utility stocks even though the debt can be high and the DPRs high. I plan to keep this stock. I would agree with the analysts that rate it as a Hold. I think that the stock price is probably on the expensive side.
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. I also made additional purchases in 2005, 2011, 2022 and 2023.
When I was updating my spreadsheet, I noticed I have had this stock for just over 20 years and I have made several purchases with a Total Return of 11.77% with 6.66% from capital gains and 5.11% from dividends.
I also noticed that this stock has done so much better than TransAlta over the years. This is especially true where dividends come in. For Dividends, Emera has been a good steady dividend growth stock. TransAlta dividends have been up and down and flat a lot. The exception is the last 10 years where stock price for TransAlta shot up. What I do not like about utilities is the high debt and high DPRs which is what this company has. TransAlta does have been DPRs but dividend is low.
If you had invested in this company in December 2015, for $1,037.52 you would have bought 24 shares at $43.23 per share. In December 2025, after 10 years you would have received $602.04 in dividends. The stock would be worth $1,623.36. Your total return would have been $2,225.40. This would be a total return of 9.29% per year with 4.58% from capital gain and 4.72% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $43.23 | $1,037.52 | 24 | 10 | $602.04 | $1,623.36 | $2,225.40 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.10%. The 5, 10 and historical median dividend yields are also moderate at 4.82%, 4.81% and 4.80%. The dividends increases are low (below 8% per year) at 3.3% per year over the past 5 years. The last dividend increase was in 2025 and it was for 1.03%.
The Dividend Payout Ratios (DPR) are too high. The DPR for 2025 for Earnings per Share (EPS) is too high at 86% with 5 year coverage at 97%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is too high at 83% with 5 year coverage at 90%. The DPR for 2025 for Adjusted Funds from Operations (AFFO) is too fine at 73% with 5 year coverage at 84%. The DPR for 2025 for Dividends paid in cash is better but still too high at 57% with 5 year coverage at 70%. I prefer the ratio to be in the 40% ranges.
The DPR for 2025 for Cash Flow per Share (CFPS) is good at 34% with 5 year coverage at 41%. The DPR for 2025 for Free Cash Flow (FCF 1) is non-calculable due to a negative FCF with 5 year coverage non-calculable due to a negative FCF. The DPR for 2025 for Free Cash Flow (FCF 2) is good at 49% with 5 year coverage a bit high at 55%. FCF for 2025 varies from a negative $1,730M to $1,186M. That is a wide range.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 86.02% | 97.43% |
| AEPS | 83.25% | 89.76% |
| AFFO | 73.42% | 84.04% |
| Div Pd Cash | 56.80% | 70.48% |
| CFPS | 34.29% | 41.29% |
| FCF 1 | 0.00% | -43.49% |
| FCF 2 | 48.57% | 54.63% |
Debt Ratios need improving and debt is too high. The Long Term Debt/Market Cap Ratio for 2025 is fine at 0.90 and currently at 0.87. The Liquidity Ratio for 2025 is far too low at 0.66 and 0.66 currently. If you added in Cash Flow after dividends, the ratios are still far too low at 0.80 and currently at 0.91. Even if you add back in the current portion of the long term debt which is being dealt with the ratio is still below 1.00 and far too low at 0.98 and currently at 0.99. The Debt Ratio for 2025 is fine at 1.43 and 1.43 currently. I prefer this to be 1.50 or higher. The Leverage and Debt/Equity Ratios for 2025 are too high at 3.75 and 2.63 and currently at 3.75 and 2.63. Utility tend to have high debt loads.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.90 | 0.87 |
| Intang/GW | 0.27 | 0.26 |
| Liquidity | 0.66 | 0.66 |
| Liq. + CF | 0.80 | 0.91 |
| Liq. + CF + D | 0.98 | 0.99 |
| Debt Ratio | 1.43 | 1.43 |
| Leverage | 3.75 | 3.75 |
| D/E Ratio | 2.63 | 2.63 |
The Total Return per year is shown below for years of 5 to 33 to the end of 2025. 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. |
|---|---|---|---|---|---|
| 2020 | 5 | 3.27% | 9.24% | 4.57% | 4.68% |
| 2015 | 10 | 5.75% | 9.29% | 4.58% | 4.72% |
| 2010 | 15 | 6.30% | 9.85% | 5.26% | 4.59% |
| 2005 | 20 | 6.10% | 10.65% | 6.01% | 4.64% |
| 2000 | 25 | 5.09% | 9.92% | 5.51% | 4.41% |
| 1995 | 30 | 4.48% | 10.73% | 5.79% | 4.94% |
| 1992 | 33 | 4.33% | 10.94% | 5.73% | 5.20% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 16.26, 17.86 and 20.46. The corresponding 10 year ratios are 15.91, 18.11 and 20.82. The corresponding historical ratios are 13.76, 15.68 and 17.30. The current P/E Ratio is 20.07 based on EPS estimate for 2026 of $3.56 and a stock price of $71.40. The current P/E Ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above 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 15.15, 17.45 and 19.93. The corresponding 10 year ratios are 16.23, 18.24 and 20.08. The corresponding historical ratios are 15.06, 16.98 and 19.00. The current P/E Ratio is 20.52 based on AEPS estimate for 2026 of $3.48 and a stock price of $71.40. The current P/E Ratio is above the high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/Adjusted Funds from Operations Ratios are 13.46, 15.24 and 17.47. The corresponding 10 year ratios are 14.92, 15.41 and 16.26. The corresponding historical ratios are 13.46, 15.00 and 16.33. The current P/E Ratio is 16.88 based on AFFO estimate for 2026 of $4.23 and a stock price of $71.40. The current P/E Ratio is above the high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $55.71. The 10-year low, median, and high median Price/Graham Price Ratios are 0.98, 1.08 and 1.21. The current ratio is 1.28 based on a stock price of $71.40. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive. This is a good test and one of my favourites.
I get a 10-year median Price/Book Value per Share Ratio of 1.55. The current ratio is 1.80 based on a Book Value of $11,960, Book Value per Share of $39.63 and a stock price of $71.40. The current ratio is 16% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have a Book Value per Share estimate for 2026 of $40.01. This analyst calculates the Book Value different from me and here the 10 year median is 1.39. The current ratio is 1.78 based on a Book Value of $12,073M, Book Value per Share of $40.01 and a stock price $71.40. The current ratio is 29% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 8.24. The current ratio is 8.49 based on Cash Flow per Share estimate for 2026 of $8.41, Cash Flow of $2,538M, and a stock price of $71.40. The current ratio is 3% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 4.80%. The current dividend yield is 4.10% based on dividends of $2.93 and a stock price of $71.40. The current dividend yield is below the historical median dividend yield by 15%. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 4.81%. The current dividend yield is 4.10% based on dividends of $2.93 and a stock price of $71.40. The current dividend yield is below the historical median dividend yield by 15%. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 2.04. The current P/S Ratio is 2.56 based on Revenue estimate for 2026 of $8,419M, Revenue per Share of $27.90 and a stock price of $71.40. The current ratio is 25% above the 10 year median ratio. I get an historical median dividend yield of 4.80%. The current dividend yield is 4.10% based on dividends of $2.93 and a stock price of $71.40. The current dividend yield is below the historical median dividend yield by 15%. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably on the expensive side. The dividend yield tests say it is reasonable but above the median. However, this is not confirmed by the P/S Ratio test which says that the stock price is expensive. All the testing is saying that the stock price is reasonable but above the median or expensive.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (3), Hold (8), Underperform (1), and Sell (1). The consensus would be a Hold. The 12 months stock price consensus is $70.75. The consensus stock price of $70.75 implies a total return 3.19% with a 0.91% capital loss and dividends of 4.10% based on a current stock price of $71.40.
The only entry on Stock Chase for 2026 is a Top Pick. For 2025 there were Buys and Holds. One said Sell because he liked a US utility better. Amy Legate-Wolfe on Motley Fool likes this stock for its dependability. Sneha Nahata on Motley Fool likes this stock for its safe and high yield. The company put out Press Release about their fourth quarter of 2025 results.
Simply Wall Street via Yahoo Finance reviews this stock. They say that the Fair Value moved from $69.00 to $69.82. They have two warnings out of interest payments are not well covered by earnings; and dividend of 4.1% is not well covered by free cash flows.
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 TransAlta Corp (TSX-TA, NSYE-TAC) ... learn more. The next stock I will write about will be H & R Real Estate Trust (TSX-HR.UN, OTC-HRUFF) ... learn more on Monday, March 30, 2026 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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