EMERA INC (EMA.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:EMA - CA2908761018 - Common Stock
68.45 CAD
-0.36 (-0.52%)
We assign a fundamental rating of 3 out of 10 to EMA. EMA was compared to 18 industry peers in the Electric Utilities industry. EMA has a bad profitability rating. Also its financial health evaluation is rather negative. EMA is quite expensive at the moment. It does show a decent growth rate. Finally EMA also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year EMA was profitable.
- EMA had a positive operating cash flow in the past year.
- Each year in the past 5 years EMA has been profitable.
- Each year in the past 5 years EMA had a positive operating cash flow.
1.2 Ratios
- EMA's Return On Assets of 2.56% is in line compared to the rest of the industry. EMA outperforms 50.00% of its industry peers.
- EMA has a Return On Equity of 8.29%. This is comparable to the rest of the industry: EMA outperforms 50.00% of its industry peers.
- EMA has a Return On Invested Capital of 3.70%. This is amonst the worse of the industry: EMA underperforms 94.44% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for EMA is in line with the industry average of 4.03%.
- The 3 year average ROIC (3.14%) for EMA is below the current ROIC(3.70%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.56% | ||
| ROE | 8.29% | ||
| ROIC | 3.7% |
ROA(3y)2%
ROA(5y)2.1%
ROE(3y)6.7%
ROE(5y)7.06%
ROIC(3y)3.14%
ROIC(5y)2.92%
1.3 Margins
- Looking at the Profit Margin, with a value of 12.89%, EMA is doing worse than 94.44% of the companies in the same industry.
- EMA's Profit Margin has declined in the last couple of years.
- EMA's Operating Margin of 23.65% is on the low side compared to the rest of the industry. EMA is outperformed by 88.89% of its industry peers.
- In the last couple of years the Operating Margin of EMA has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.65% | ||
| PM (TTM) | 12.89% | ||
| GM | N/A |
OM growth 3Y3.96%
OM growth 5Y-4.26%
PM growth 3Y-8.12%
PM growth 5Y-8.76%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so EMA is destroying value.
- Compared to 1 year ago, EMA has more shares outstanding
- The number of shares outstanding for EMA has been increased compared to 5 years ago.
- The debt/assets ratio for EMA has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.78, we must say that EMA is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 0.78, EMA belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
- EMA has a Debt/Equity ratio of 1.47. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 1.47, EMA is doing worse than 94.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.47 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.78 |
ROIC/WACC0.63
WACC5.85%
2.3 Liquidity
- EMA has a Current Ratio of 0.72. This is a bad value and indicates that EMA is not financially healthy enough and could expect problems in meeting its short term obligations.
- EMA has a Current ratio of 0.72. This is comparable to the rest of the industry: EMA outperforms 55.56% of its industry peers.
- EMA has a Quick Ratio of 0.72. This is a bad value and indicates that EMA is not financially healthy enough and could expect problems in meeting its short term obligations.
- EMA has a Quick ratio (0.57) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.72 | ||
| Quick Ratio | 0.57 |
3. Growth
3.1 Past
- EMA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 38.83%, which is quite impressive.
- EMA shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.49% yearly.
- Looking at the last year, EMA shows a quite strong growth in Revenue. The Revenue has grown by 15.17% in the last year.
- Measured over the past years, EMA shows a small growth in Revenue. The Revenue has been growing by 3.33% on average per year.
EPS 1Y (TTM)38.83%
EPS 3Y1.4%
EPS 5Y2.49%
EPS Q2Q%8.64%
Revenue 1Y (TTM)15.17%
Revenue growth 3Y7.69%
Revenue growth 5Y3.33%
Sales Q2Q%16.87%
3.2 Future
- Based on estimates for the next years, EMA will show a small growth in Earnings Per Share. The EPS will grow by 7.96% on average per year.
- The Revenue is expected to grow by 2.56% on average over the next years.
EPS Next Y21.44%
EPS Next 2Y9.9%
EPS Next 3Y7.83%
EPS Next 5Y7.96%
Revenue Next Year14.29%
Revenue Next 2Y4.69%
Revenue Next 3Y6.1%
Revenue Next 5Y2.56%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 18.06, the valuation of EMA can be described as rather expensive.
- Based on the Price/Earnings ratio, EMA is valued expensively inside the industry as 83.33% of the companies are valued cheaper.
- EMA is valuated rather cheaply when we compare the Price/Earnings ratio to 27.32, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 19.28, the valuation of EMA can be described as rather expensive.
- Based on the Price/Forward Earnings ratio, EMA is valued expensively inside the industry as 83.33% of the companies are valued cheaper.
- When comparing the Price/Forward Earnings ratio of EMA to the average of the S&P500 Index (24.32), we can say EMA is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.06 | ||
| Fwd PE | 19.28 |
4.2 Price Multiples
- 83.33% of the companies in the same industry are cheaper than EMA, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 11.87 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PEG (NY)0.84
PEG (5Y)7.26
EPS Next 2Y9.9%
EPS Next 3Y7.83%
5. Dividend
5.1 Amount
- EMA has a Yearly Dividend Yield of 4.31%, which is a nice return.
- Compared to an average industry Dividend Yield of 4.43, EMA has a dividend in line with its industry peers.
- EMA's Dividend Yield is rather good when compared to the S&P500 average which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.31% |
5.2 History
- The dividend of EMA has a limited annual growth rate of 3.46%.
- EMA has paid a dividend for at least 10 years, which is a reliable track record.
- EMA has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.46%
Div Incr Years18
Div Non Decr Years26
5.3 Sustainability
- 57.91% of the earnings are spent on dividend by EMA. This is a bit on the high side, but may be sustainable.
- The dividend of EMA is growing, but earnings are growing more, so the dividend growth is sustainable.
DP57.91%
EPS Next 2Y9.9%
EPS Next 3Y7.83%
EMERA INC / EMA.CA FAQ
What is the fundamental rating for EMA stock?
ChartMill assigns a fundamental rating of 3 / 10 to EMA.CA.
Can you provide the valuation status for EMERA INC?
ChartMill assigns a valuation rating of 2 / 10 to EMERA INC (EMA.CA). This can be considered as Overvalued.
What is the profitability of EMA stock?
EMERA INC (EMA.CA) has a profitability rating of 3 / 10.
What are the PE and PB ratios of EMERA INC (EMA.CA) stock?
The Price/Earnings (PE) ratio for EMERA INC (EMA.CA) is 18.06 and the Price/Book (PB) ratio is 1.55.
What is the expected EPS growth for EMERA INC (EMA.CA) stock?
The Earnings per Share (EPS) of EMERA INC (EMA.CA) is expected to grow by 21.44% in the next year.