Strong performance from the company’s New England gas plants bodes well for earnings growth. Its current annual dividend of $1.60 a share yields about four per cent and puts it on any high dividend stocks list.
Emera Inc. (TSX─EMA) has had a strong start to the year, with record first-quarter adjusted earnings. Growth was driven by every segment of the company, but led by the performance of its New England gas plants. Adjusted earnings before interest, taxes, depreciation and amortization at Emera Energy Generation increased 186 per cent to $75.7 million, thanks primarily to higher margins realized at the New England facilities, reflecting favorable short-term economic hedges, and the strengthening of the U.S. dollar.
Emera is a geographically diverse energy and services company headquartered in Halifax, Nova Scotia, with $10.2 billion in assets and 2014 revenues of $3.0 billion. The company invests in electricity generation, transmission and distribution, as well as gas transmission and utility energy services.
Earnings keep Emera on income stocks list
For the three months ended March 31, 2015, Emera made $160.1 million (adjusted), or $1.10 a share, compared with $146.6 million, or $1.03 a share, in the similar period of 2014. An expected reduction in Emera Energy’s trading and marketing contribution was more than fully offset by the increased contributions from the segment’s New England gas generation facilities.
Emera Energy, of which the New England plants are a part, saw its net income rise 25 per cent to $76.4 million. Emera’s other major segment, Nova Scotia Power Inc., increased its income by 1.8 per cent to $68.0 million.
Earnings growth outlook favourable
These positive results, together with improved visibility of earnings from the Maritime Link project, a transmission line that will let Nova Scotia import hydro electricity from Labrador, has convinced Emera that it can deliver on its growth targets. Meanwhile, earnings from the generating assets in New England should continue to contribute to higher earnings in 2015.
The stock trades at a reasonable multiple of the $2.27 a share Emera will likely earn in 2015. Its current annual dividend of $1.60 a share yields about four per cent and earns it a place on any high dividend stocks list.
Emera is a buy for growth and income.
Money Reporter, MPL Communications Inc.
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