Emera Inc.
🇨🇦 EMA.TO · Toronto · CA2908761018
Utilities
CAD 71.96 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
19.8
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 71.96 ÷ 3.63 = 19.8
TTM period through: 2025-12-31
Forward P/E (estimated): 19.6
Based on analyst estimates
Reference: Provider P/E (Trailing): 21.1
Yield (Fwd)
4.06%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 4.08%
Div. Growth (5Y CAGR)
3.5%
Growth Streak
9 yrs
Consecutive years of increase
Net Debt/EBITDA (TTM)
7.5x
Latest quarter: 63.7x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 63.7x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
80.3%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 59.8%
Cash Flow Payout (TTM): 36.1%
FCF Coverage (TTM): -2.66x
ROE
8.2%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
12.7x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
📊 What Changed From Last Analysis?
Moved from WATCH to OPTIMAL: Record Q1 2026 earnings beat reversed the recent declining earnings trajectory, highlighting the deep undervaluation represented by its 8.67x P/FFO multiple relative to fair value estimates.
Summary
Emera is a high-quality regulated utility offering a very secure 4.1% yield backed by a decade of consecutive dividend growth. Trading at 71.96 CAD, the stock sits well below our P/FFO fair value estimate of 99-149 CAD, representing a significant upside opportunity driven by its cheap 8.67x P/FFO multiple. Following a record Q1 earnings beat that reaffirmed its growth trajectory, this represents an attractive entry point for dividend investors seeking defensive income; consider initiating positions below 80 CAD.
Sector Context
Emera is a diversified utility providing essential, regulated electricity and natural gas services across North America and the Caribbean. For dividend investors, regulated utilities offer monopolistic characteristics with highly predictable cash flows, allowing them to safely carry higher debt levels. Because they have massive physical assets that depreciate on paper, traditional metrics like P/E and Free Cash Flow are often distorted, making P/FFO (Price to Funds From Operations) the most accurate valuation metric.
Temporary Opportunity Identified
Heavy capital expenditures distort traditional GAAP metrics (elevated P/E and negative FCF), leading the market to undervalue the company's robust true cash generation capability (P/FFO) amid recent interest rate volatility.
📊 Strategy Analysis
- • Trading at a highly attractive P/FFO of 8.67x, well below the fair value range of 99.62 - 149.43 CAD, indicating deep undervaluation for its core infrastructure assets despite a higher GAAP P/E.
- • Recent Q1 2026 results delivered a record adjusted EPS of $1.37, beating estimates and reversing the recent declining earnings trajectory.
- • Highly sustainable 4.08% dividend yield with an impeccable 10-year track record of consecutive growth, comfortably covered by operating cash flows with a conservative 36.1% cash flow payout ratio.
- • Operates as a regulated natural monopoly, providing highly visible and predictable long-term cash flows that support its capital-intensive business model.
⚠ What to Watch
- • Elevated debt profile with a Net Debt/EBITDA of 7.45x, though stable historically and typical for regulated utilities, requires continuous access to debt markets.
- • Heavy capital expenditure programs result in persistent negative free cash flow (-CAD 754M), meaning ongoing growth relies heavily on external financing.
- • GAAP P/E of 19.8x sits near the top end of the acceptable range for quality monopolies, though P/FFO provides a more accurate picture of earnings power.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-05-09
Disclaimer: This information is for educational purposes only. Not financial advice.