Emera can handle its debt load

Article Excerpt

EMERA INC. $44 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares o/s: 233.0 million; Market cap: $10.3 billion; Price-to-sales ratio: 1.7; Divd. yield: 5.4%; TSINetwork Rating: Average; www.emera.com) has spent $2 billion in the past year on new projects. Those include its 49.5%-owned Labrador Island Link, which transmits power from a new hydroelectric facility at Muskrat Falls, Labrador, to the island of Newfoundland. Nalcor (Newfoundland’s government-owned power company) owns the other 50.5%. Emera has also completed its 100%-owned Maritime Link undersea cable, which transmits electricity from the island of Newfoundland to Nova Scotia. It cost $1.6 billion. Due to those projects, the company’s long-term debt was $13.6 billion as of September 30, 2018, or a high 1.32 times its market cap. To help pay that down, Emera continues to sell some of its non-core assets. For example, the company will now sell three natural-gas-fired power plants in New England for a total of $590 million U.S. Emera is a buy. buy…

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