Understanding the Dividend Performance and Sustainability of Emera Inc
Emera Inc (EMRAF, Financial) recently announced a dividend of $0.72 per share, payable on 2023-11-15, with the ex-dividend date set for 2023-10-31. This announcement has drawn attention to the company's dividend history, yield, and growth rates. Let's delve into Emera Inc's dividend performance and assess its sustainability using data from GuruFocus.
Overview of Emera Inc
Emera Inc is a geographically diverse energy and services company investing in electricity generation, transmission, and distribution as well as gas transmission and utility energy services. The company operates throughout North America and the Caribbean countries.
Emera Inc's Dividend History
Emera Inc has maintained a consistent dividend payment record since 2009, with dividends currently distributed on a quarterly basis. Let's examine the annual Dividends Per Share to track historical trends.
Emera Inc's Dividend Yield and Growth
Emera Inc currently has a 12-month trailing dividend yield of 6.18% and a 12-month forward dividend yield of 6.35%. This indicates an expectation of increased dividend payments over the next 12 months.
Emera Inc's dividend yield of 6.18% is near a 10-year high and outperforms 72.2% of global competitors in the Utilities - Regulated industry. This suggests that Emera Inc's dividend yield is an attractive proposition for income investors.
Over the past three years, Emera Inc's annual dividend growth rate was 4.10%. Extended to a five-year horizon, this rate increased to 4.50% per year. Over the past decade, Emera Inc's annual dividends per share growth rate stands at 7.70%. Based on Emera Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Emera Inc stock as of today is approximately 7.70%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The sustainability of Emera Inc's dividend can be assessed by evaluating its payout ratio. The dividend payout ratio reveals the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Emera Inc's dividend payout ratio is 0.60.
Emera Inc's profitability rank of 7 out of 10 suggests good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Emera Inc's Growth Metrics
For the sustainability of dividends, a company must have robust growth metrics. Emera Inc's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Emera Inc's revenue per share and 3-year revenue growth rate indicate a strong revenue model. Emera Inc's revenue has increased by approximately 3.90% per year on average, a rate that underperforms approximately 68.93% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Emera Inc's earnings increased by approximately 8.80% per year on average, a rate that underperforms approximately 41.94% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 13.00% underperforms approximately 29.03% of global competitors.
Conclusion
Emera Inc has demonstrated a consistent track record of dividend payments, with a promising growth rate. The company's payout ratio and profitability rank indicate a sustainable dividend policy. However, its growth metrics suggest that there may be some challenges in sustaining the current rate of dividend growth. Therefore, investors should closely monitor Emera Inc's growth metrics and future earnings to assess the long-term sustainability of its dividends.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
