Wednesday, August 12, 2015

Dividend Increase

     On August 10, Emera Inc. announced there earnings for the second quarter. Some of the highlights of the most recent quarter are as follows.
  •     Adjusted earnings per share increase 6.5% to $0.33 per share in the quarter and 12.7% to $1.51 YTD.
  • Adjusted net income  increased 8.6% to $48.0 million this quarter and 15% to $219.6 million YTD.
Emera Inc is a  utility involved in the generation and transmission of electricity along with gas transmission and utility energy services. Also this company is involved in a major project that will involve a underwater transmission of electrical energy from Newfoundland to Nova Scotia. This project will involve harnessing the tidal Energy at Muskrat Falls in Labrador and provide power to Newfoundland and Nova Scotia, New Brunswick and parts of New England. This major project is known as the Maritime Link project. Emera also is the parent company of Nova Scotia Power and is a major shareholder in Algonquin Power & Utilities Corp. The have interests in Bangor power and assets in the Caribbean also.

With the release of the earnings, the company also announced a dividend increase of 18.75% starting with the first payment in Nov 2015. Emera also announced their goal is to grow the dividend at a rate of 8% annually through to 2019, which was the goal originally was 6% annually. Emera is also scheduled to pay a dividend on August 17, 2015.

The dividend increase from $1.60 a share to $1.90 a share adds $30.00 to my annual dividend income. What did I have to do to receive this raise? I had to do nothing except be a shareholder in this wonderful business. Everyone needs electricity to help live their lives these days.  If I assumed a 3.5% yield, this $30.00 a year in dividends, would be equivalent of investing $857.14 of my own money.

I will happily take an 18.75% dividend raise. It would be difficult to get that type of raise at a job in any given year. 

Disclosure: Long EMA


     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk


  1. We are not too familiar with Emera but we always love to hear about dividend increases because that means someone out there in the DGI community is getting a raise. And in this case, a nice 18% raise!

    Thanks for sharing. AFFJ

    1. AFFJ,

      Thanks for dropping by. I will definitely not complain about this raise. Emera was predicting a few quarters ago, a dividend growth rate of 6% for the next few years. It was was definitely nice to see this increase and predicting the dividend with grow at 8% for the new couple of years.

  2. Thanks for sharing IP. Awesome. Great to be a fellow shareholder with you. One day when it dips, we gotta increase our stakes in this company. Until then, keep it up my friend. Cheers bud.

    1. Dividend Hustler,

      EMA is a company who services are a necessity in this age as more and more people have computers, and live more comfortable lives. Electricity is something we all take for granted such as when we flick a light switch and light appears. Life near stops for some people when the power goes out.

      I have owned this company for about 3 years now I believe.

  3. Congrats on the increase, IP. I dont own Emera, but its good to see a nice chunky increase from a Cdn company.


    1. R2R,

      Thanks for dropping by. It was a welcome, although a huge surprise, to see a raise of this magnitude. But I will gladly take it :)

  4. An interesting case of a situation where a one stage DDM may actually be useful. If I assume a 12% req'd rate of return and g = 8% (Emera's target dividend growth rate), this produces: $1.9 / (12% - 8%) = $47.50...lo and behold, the market immediately reacted and pushed EMA up to $46 on the announcement of the dividend increase!