EMERA INC. $34 - Toronto symbol EM

EMERA INC. $34 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 142.6 million; Market cap: $4.8 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.3%; TSINetwork Rating: Average; www.emera.com) is Nova Scotia’s main power supplier. It also holds interests in electrical utilities in the U.S. and the Caribbean.

Emera is currently building the Maritime Link, which will transmit electricity from the island of Newfoundland to Nova Scotia through an undersea cable. The power will come from a new hydroelectric project on Labrador’s Churchill River. The company will spend $1.6 billion on Maritime Link, which should begin operating in 2017.

Separately, Emera will pay $390 million for a 34.9% stake in a new utility that will transmit power from Churchill River to Newfoundland.

Meanwhile, the company earned $44.2 million in the three months ended June 30, 2014. That’s up 3.8% from $42.6 million a year earlier. Emera sold shares to help pay for Maritime Link. As a result, earnings per share fell 3.1%, to $0.31 from $0.32.

Revenue in the quarter rose 11.9%, to $566.6 million from $506.5 million, mainly due its recent purchase of three power plants in New England.

The stock trades at 16.3 times Emera’s likely 2014 earnings of $2.09 a share. The $1.45 dividend yields 4.3%.

Emera is a buy.

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