Opinions
Hap (Robert) Sneddon FCSI
Emera Inc
EMA-T
HOLD
Sep 21, 2017
Stock price when the opinion was issued
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Bumps along the road, but the price has appreciated. Utilities are always levered, so as rates go up, there's more interest expense on the balance sheet and less profit hits the bottom line. Rates coming down have helped EMA's profit. Over time, expectation is that it will be the better choice. Yield is north of 5%.
Premium contentA boring, stable utility. Pretty much discarded last year with people chasing the AI trend. Big move since January with the flight to safety. Outlook was upgraded from Negative to Stable. Good job reducing leverage. Florida just approved storm reparation costs from 2 hurricanes in 2024.
Likes it. Up 21% YTD. They do what they say they're going to do. Nova Scotia now coming out of its rate freeze, should see earnings increase in 2026. Asset sales mean that debt level is OK. Dividend can still be increased, though at lower levels than historically. Has trouble trimming a name that's been really good to her, especially as she's a long-term investor.
Utilities is her favourite sector. If economy rolls over, $$ will come out of the high-torquey sectors and move to defensive.
In line with what he had talked about earlier on, with rotation in defences, he can see this sort of started back in the spring. It hasn’t broken down terribly. If you have a nice profit, maybe you want to take some off the table. It is probably going to want to migrate back to $43. Not a huge move and you get a nice dividend on this. As we move throughout the year, the pro-growth themes will start to get a little long in the tooth, and people may start to re-evaluate what is going on. This would be the exact kind of name he would be looking at as we move through the winter and into the new year, and asking if this was a good price. $42-$43 would be where he would be most interested. You shouldn’t sell this now.