EMRAF
Emera Incorporated
$45.13
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 11.3% above fair value
You pay
$45.13
Bear
$35.49
Fair
$40.56
Bull
$45.63
Bear
$35.49
-21.4%
$2.54 × 14x P/E
Fair
$40.56
-10.1%
$2.54 × 16x P/E
Bull
$45.63
+1.1%
$2.54 × 18x P/E
Adjust Assumptions
16.0x
2.54$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
17.8x
Summary
Applying a 16x P/E to adjusted EPS of $2.54, the base-case value is $40.56 per share. DDM cross-check: $30.66.
Warnings
The company pays out 84% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $30.66 (below our primary estimate by 24%). 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