EMA
Emera Incorporated
$46.58
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 21.3% above fair value
You pay
$46.58
Bear
$33.60
Fair
$38.40
Bull
$43.20
Bear
$33.60
-27.9%
$2.40 × 14x P/E
Fair
$38.40
-17.6%
$2.40 × 16x P/E
Bull
$43.20
-7.3%
$2.40 × 18x P/E
Adjust Assumptions
16.0x
2.4$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
19.4x
Summary
Applying a 16x P/E to adjusted EPS of $2.40, the base-case value is $38.40 per share. DDM cross-check: $30.62.
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: $30.62 (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 0.7101 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