Emera (TSX:EMA) Valuation Update Following $750M Notes Offering and Dividend Increase

Emera (TSX:EMA) just wrapped up a US$750 million junior subordinated notes offering. At the same time, its Board approved a lift to the quarterly dividend. These moves highlight a clear focus on capital flexibility and investor returns.

See our latest analysis for Emera.

With the new capital raise and dividend hike, investor confidence in Emera has steadily improved. The latest $67.05 share price reflects ongoing momentum, while a 1-year total shareholder return of 42% highlights this utility’s resilience and the compounding power of its dividends. Over the long term, performance has remained positive, and these developments suggest the market is beginning to recognize Emera’s growth potential.

If recent moves in companies like Emera have your attention, this could be the perfect moment to broaden your search and discover fast growing stocks with high insider ownership

With shares outperforming the broader market and strong recent results, investors face a key question: does Emera still trade below its true value, or is the market already accounting for its future growth prospects?

Most Popular Narrative: Fairly Valued

With Emera shares recently closing at CA$67.05 and the most widely followed narrative placing fair value at CA$65.04, the market’s current pricing nearly matches analyst expectations, leaving little room for surprises from valuation alone.

The company is investing heavily in grid modernization, renewables (notably, a $2+ billion solar expansion in Florida), and infrastructure resilience. All of these initiatives are underpinned by favorable regulatory environments and customer growth, supporting stable, long-term increases in rate base and revenue growth.

Read the complete narrative.

Wondering what bold growth targets and future profit multiples fuel this closely watched fair value? The narrative hints at a power play built around aggressive infrastructure investment and regulatory tailwinds but keeps the deal-making details just out of reach. Unpack the intriguing assumptions that set the stage for Emera’s next act by diving into the full narrative.

Result: Fair Value of $65.04 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent high interest rates or delays in regulatory approvals could put pressure on Emera's earnings growth and challenge the consensus view on fair value.

Find out about the key risks to this Emera narrative.

Another View: Discounted Cash Flow Perspective

While the consensus view suggests Emera is fairly valued, our SWS DCF model offers a different take. According to this approach, Emera is actually trading at about 23% below its fair value. This points to potential undervaluation. Does this mean the market is overlooking long-term cash flow potential?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Emera for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Emera Narrative

If you want a fresh angle or would rather draw your own conclusions, you can build a personalized Emera outlook yourself in just minutes. Do it your way

A great starting point for your Emera research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Looking for More Investment Ideas?

Don’t leave your portfolio’s next breakout to chance. These unique stock ideas can give you a real edge, so check them out before the crowd moves in:

• Spot powerful growth potential early and get ahead with these 3574 penny stocks with strong financials, which combine strong financials with exciting upside.
• Unlock reliable income streams by targeting these 19 dividend stocks with yields > 3%, offering attractive yields and proven dividend histories.
• Capitalize on future healthcare disruptors by zeroing in on these 32 healthcare AI stocks, found at the intersection of automation and medicine.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com