Buy Emera for income from growing renewable energy demand

Emera’s subsidiary, Nova Scotia Power Maritime Link, has entered into the first of the Maritime Link project’s major contracts: the supply and installation of the high-voltage direct current submarine cable. The Maritime Link involves the construction and operation of a new 500 megawatt transmission line and associated infrastructure between Granite Canal, Newfoundland and Labrador, and Woodbine, Nova Scotia.

The link connects Newfoundland and Nova Scotia to the North American transmission grid for the first time. It’s part of a comprehensive, long-term and sustainable electrical power management strategy to address the growing demand for more renewable energy.

Emera is an energy and services company that owns and invests in electricity generation, transmission and distribution, gas transmission, utility services and provides energy marketing, trading and other energy-related management services. The company’s business interests are primarily in northeastern North America and the Caribbean.

For the three months ended March 31, 2014, Emera made $146.6 million, or $1.03 a share, compared with $115.4 million, or $0.88 a share, in the same period of 2013. Revenues rose 65 per cent to $1.1 billion.

Revenue growth was driven mostly by the 2013 acquisitions of the New England Gas Generating Facilities, Brooklyn Energy and Dominica Electricity. Also, increased volatility in gas markets provided increased margin opportunity and contribution. Finally, the effect of a stronger U.S. dollar increased Canadian-dollar operating revenues. Lower income from equity investments and other sources curbed income growth.

In the coming years, Emera stands to profit from its concentration on expanding the clean energy and transmission system in Atlantic Canada, the U.S. northeast and the Caribbean. It plans to achieve carbon reduction in a cost-effective and productive manner.

The stock trades at 16.5 times the $2.05 a share that Emera will likely earn in 2014. And it yields an attractive 4.3 per cent.

Emera (TSX-EMA) is a buy for income and some growth.

 

 

Money Reporter, MPL Communications Inc.
133 Richmond St. W., Toronto, On, M5H 3M8, 1-800-804-8846

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