EMA
Emera Incorporated
$54.34
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 41.5% above fair value
You pay
$54.34
Bear
$33.61
Fair
$38.41
Bull
$43.21
Bear
$33.61
-38.1%
$2.40 × 14x P/E
Fair
$38.41
-29.3%
$2.40 × 16x P/E
Bull
$43.21
-20.5%
$2.40 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
22.6x
Summary
Applying a 16x P/E to adjusted EPS of $2.40, the base-case value is $38.41 per share. DDM cross-check: $30.56.
Warnings
The company pays out 88% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $30.56 (below our primary estimate by 20%). Large gaps may signal the dividend doesn't reflect full earning power.
Financial statements were converted from CAD into USD using USDCAD at 0.7103 USD per CAD.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples