Emera Inc (EMA-T)

Utilities are her largest sector weight. Defensive, regulated earnings. Secular trend as we transition off fossil fuels. Long-term growth opportunities. Biggest asset is in Florida, a good jurisdiction. Stock came off due to hurricanes. Yield is 5.5%, grows at a small rate.

Likes it long term, but is enduring issues now. 

There could be a space for utilities in a portfolio, given high dividends above 5% as interest rates decline. They have exposure to Tampa which the hurricane didn't hit badly. EMA is a good income vehicle.

It is well run and lower interest rates will be a catalyst for utility companies, There are issues with parts of the U.S. due to the effects of the recent hurricane which is really the latest in a series of hurricanes.

(Note short timeframe.) Defensive. Will benefit from interest rates coming down. Asset base should grow ~7% a year, dividend by 4-5% a year. Doing what they say they will. Additional asset sales to bring debt down; with interest rates coming down, may not need to sell as much.

Operates in Florida, which has one of the fastest-growing populations.

Near term, lots of $$ coming into utilities partly because of rate cuts. That's fine. Saw generational low interest rates in 2020, and we're going to see rates ratchet slowly higher for next 15-20 years. So inflation and rates are going to be stickier, making bond proxies harder longer term.

So you need to make sure you have dividend growth. Lean toward dividend growth, rather than high dividend but low growth. He'd prefer CPX, a smaller company with better record of dividend growth, technically a lot better.

Lower rates will be favourable to it. Valuation should probably improve over remainder of the year and into 2025. Decent upside for growth, dividend safer than some higher ones. Yield is 5.5%, not excessively high.

Some asset sales. Next asset sale should be a catalyst, as will interest rate cuts. Lower dividend outlook hurt, growth only 1%. Stock rose in July with the rotation and bond yields coming down. He likes power names with price to growth of about 1. This one doesn't, but 5-7% EPS growth plus dividend ~6% gives you that at a lot cheaper than H or FTS.

It is long term infrastructure opportunity. He likes transmission and utilities assets and is in Florida which is a high growth area. The dividend is still growing. In general buy stocks that have growth opportunities over the next decade.

They are good operators as a distribution utility. Lower rates are a tailwind. They are selling an asset later in the year to help pay down debt. Pays a 6 1/2% dividend.

A comparable utility to CPX, but with better growth and price to growth. Cheap. Asset sales by June would be a catalyst to multiple expansion.

Its guidance is 7 to 8% but the stock has come off so there is upside if they deliver on the guidance. Even if they didn't, the downside is limited. It trades at a good price and pays a 6% dividend.

Utilities are out of favour and he owns none now, but he has owned and liked EMA in the past. Yields above 6% which can grow further. Problem is that if rates stay high for longer, shares will decline, though the yield would climb to 7%. He is watching utilities and he will eventually peck away at utilities.