Key Numbers
- New annual dividend: $2.93 per share, up 1%
- Dividend yield: 4.3%
- $20 billion capital plan through 2029
- YTD stock return: 24%
- P/E ratio: 23
Emera Inc. (TSX: EMA)(NYSE:EMA) has announced a modest 1% increase in its quarterly dividend to $0.7325 per share, marking the company’s 19th consecutive annual increase. While the uptick may appear conservative, the move underscores Emera’s long-standing commitment to shareholder returns, supported by a 7–8% forecasted rate base growth through 2029 and a targeted 5–7% average EPS growth through 2027.
The dividend boost lifts the annual payout to $2.93 per share, offering a current yield of 4.3%, which is an attractive figure for income-oriented investors, especially given the company’s regulated utility profile and stability. By comparison, the average stock on the S&P 500 yields just 1.2%. Emera has, however, generated diluted per-share profits totaling $2.95 over the trailing 12 months, which puts its payout ratio at close to 100%, suggesting that there may not be much room for large increases in the future, unless its bottom line improves drastically. Last year, the company also raised its dividend by just 1%, which is lower than the rate of inflation.
Emera operates six electric and natural gas utilities across Canada, the US, and the Caribbean, serving 2.5 million customers and managing $39 billion in assets. Headquartered in Halifax, the company continues to invest heavily in infrastructure, with a $20 billion capital plan set through 2029. This long-term investment strategy is aimed at modernizing and decarbonizing its energy delivery, with a stated focus on adapting to industry shifts such as decentralization and digitalization. That strategic positioning has resonated with investors this year, as shares have climbed 24% year-to-date, significantly outpacing the broader utilities sector. However, over a five-year horizon, Emera has returned just 20%, reflecting the sector’s broader challenges in recent years and a previously lower growth trajectory.
With a price-to-earnings ratio of 23, Emera trades at a premium relative to some North American utility peers, suggesting investor confidence in its forward-looking capital program and earnings growth targets. The steady dividend growth, combined with the company’s essential services model and strong regulated asset base, enhances its appeal in volatile markets.
Emera suits dividend-focused investors seeking stable income with moderate long-term growth potential.