# Emera Inc. (EMA.TO)



## Cal

Anyone know what is up with this stock, up about 41 in the past week? Haven't really read anything. Normally this stock moves alot slower than that.

Dividend chasers upping price?

It would be great to hear from anyone out East if you know of anything.


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## mrPPincer

INK research says Emera CEO Chris Huskilson sold $11,636,650.00 of shares back in August/ 2012
Cause for concern?


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## doctrine

They had a fantastic quarter recently. Also they own a significant portion of Algonquin power which has also been doing well.


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## mrPPincer

Stock price is dropping over uncertainty about the Maritime Link.
I picked up 100 shares for $3,399.99 including commission.
Dividends look ok with not too high payout ratio.
What I like most is it only takes 100 shares to DRIP a full share, and you get a 5% discount on DRIPed shares.


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## Cal

MrPincer, keep in mind that company insiders can only make trades during certain windows of time, due to information, disclosure and various company dates.

I am not too concerned about what company insiders do.


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## Freedom45

Any thoughts on Emera's current pricing? Looking to add a utility to my portfolio and considering a small (~100 shares) long-term position. Price has run up a bit in the last few months, but it's still well below it's 52 week highs.

Anyone buying? Holding? Selling?


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## Echo

Bought this mid-December at just under $30 - no plans to sell for a few decades.


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## Canuck

I bought a bunch mid December as well at $29.75. Long term hold for me


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## My Own Advisor

Same with Echo, hold some, currently DRIPping every quarter, plan to hold for decades to come.


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## PatInTheHat

I sadly sold this one as it appeared range bound but its finally getting a move it has long deserved. I still prefer NPI and INE in the utility space but Emera is right up there.

EDIT: Should also mention this current rally in utility stocks is mainly due to interest rates flattening out or even dropping a bit. Utilities will take a hit when rates begin to rise but given how things look right now that could be quite some time.


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## lostwords

I've just started dripping this one as well and Al's plant to hold on to it for a while


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## Freedom45

What's everyone's thoughts on Emera these days. I'd really like to add more to my position, but would be averaging my ACB up from ~$32, and they're floating in the range of their 52 week highs at the moment.

Long-term position, but I'm just below the threshold for DRIP'ing an additional share each quarter. I'd like to add maybe 30 shares or so to get me over the hump.


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## 1980z28

Freedom45 said:


> What's everyone's thoughts on Emera these days. I'd really like to add more to my position, but would be averaging my ACB up from ~$32, and they're floating in the range of their 52 week highs at the moment.
> 
> Long-term position, but I'm just below the threshold for DRIP'ing an additional share each quarter. I'd like to add maybe 30 shares or so to get me over the hump.


Will just keep going up,IMHO you can buy anytime

My utility is fts


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## Financialplannerdude

I've been a long 10 years plus) DRIPPer in Emerra and when ever I dig out the statements what jumps out at me is the steady dividend increases. They've also added a direct debit option which now saves you the hassle mailing a cheque off every 3 months. I have some extra money to invest so I'm going to split between Emerra and National Bank


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## none

I worked for these guys for a couple years. Honestly, it really opened my eyes the the 'efficiency' of the private section. The waste and sloth in that place was ridiculous.

Hopefully it's changed. When you have a close to monopoly on something though I guess it's hard not to make a profit.


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## Cal

So your saying they have room to make us even more profits......


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## mrPPincer

So you want none to elaborate on his oft used saying? Is that what *you're* saying?


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## My Own Advisor

Financialplannerdude said:


> I've been a long 10 years plus) DRIPPer in Emerra and when ever I dig out the statements what jumps out at me is the steady dividend increases. They've also added a direct debit option which now saves you the hassle mailing a cheque off every 3 months. I have some extra money to invest so I'm going to split between Emerra and National Bank


I like those calls. Happy DRIPper of both EMA and NA. Nice to get paid every quarter and more every quarter after that.


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## zylon

*Company targets a dividend raise of 6% a year through 2019*



> Emera is also building wind farms and a facility that generates power from tidal forces in the Bay of Fundy. These investments will help it comply with Nova Scotia’s plan to get 50% of its power from renewable sources by 2020, up from 22% in 2014.
> 
> Emera’s strong cash flow will pay for half of these new projects. The rest will come from new debt, selling less important assets and issuing up to $250 million of new common shares.
> 
> As of March 31, 2015, the company’s long-term debt was $3.8 billion, or a high 62% of its market cap. But high debt levels are common for regulated utilities, as they generate steady cash flow to pay the interest.
> 
> The company’s new operations will also help fund its plan to raise its dividend by 6% a year through 2019. The current rate of $1.60 yields 3.8%. The stock also trades at a reasonable 18.2 times the $2.31 a share Emera should earn in 2015.


source: http://www.tsinetwork.ca/?p=77875

yep - I own some









image source: http://www.evwind.es/2015/01/07/ibe...aine-advance-northern-maine-wind-energy/49784


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## jaybee

I've owned this one for a decade. Obviously happy with it. It's outperformed the TSX and the Utilities index quite nicely.


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## londoncalling

I am not a holder of EMA. My current utilities are in AQN and a smaller position in Canadian Utilities. I am curious about the acquisition yesterday and what peoples thought are on it.

http://investors.emera.com/Cache/1001202103.PDF?Y=&O=PDF&D=&FID=1001202103&T=&IID=4072693

This move is interesting to me as now most of their business is from US operations (if I read it correctly). With the current currency rate was this a good move for Emera right now? I love the forecast of dividend increases into 2019(reminds me of Telus) and the accretive effect on business this purchase will make if it is to be true. What I like about AQN(especially now) is that it pays its divvies in US dollars. I have not dug into too deep on my research aside from some casual reading of news feeds and FWF. Curious to hear others thoughts on this deal. 

Cheers


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## doctrine

It's probably a good long term move, but in the short term, Emera paid a huge 40-50% premium to the company's stock price when the currency is down 20-30% in the last couple of years. As a result, no significant accretion until 2019 (10% by then). Compare it to Fortis's acquisitions a few years ago when they bought UNS for $6 billion - not only was the dollar > $0.9, but they only paid a 10% premium. I suspect that EMA's stock price will be capped for a few years while this is digested, so investors can be patient to jump in here. I notice FTS is creeping down below $35, so it might be the better buy as they are a few years ahead in terms of digesting their own big acquisition.


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## gardner

I guess today's drop is due to the issuance of the $41.85 debentures. At 4% these are tempting. Anyone have an opinion whether these are a good bet?


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## james4beach

I know that many of you don't like technical analysis, but the EMA chart is a champ. It's in an uptrend and shows *no sign* of weakness. Despite current selling, the stock remains above its 200 day moving average which makes it one of the strongest stocks in the entire stock market.
http://stockcharts.com/h-sc/ui?s=EMA.TO&p=D&yr=3&mn=0&dy=0&id=p25892755713

Assuming that your fundamental analysis checks OK, in technical analysis terms, it's fine to buy here. If you already hold it, there is absolutely no reason to sell it now. If it drops below its 200 day moving average, then the picture changes.


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## gardner

I've been holding EMA for a while and have some of the debentures (instalment receipts) they issued to fund buying TECO. I haven't been following closely but it seems that the TECO deal has taken longer to solidify that was expected. Is it likely to be scuttled by the new foreign corporate inversion rules in the US or something?


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## cn_habs

james4beach said:


> I know that many of you don't like technical analysis, but the EMA chart is a champ. It's in an uptrend and shows *no sign* of weakness. Despite current selling, the stock remains above its 200 day moving average which makes it one of the strongest stocks in the entire stock market.
> http://stockcharts.com/h-sc/ui?s=EMA.TO&p=D&yr=3&mn=0&dy=0&id=p25892755713
> 
> Assuming that your fundamental analysis checks OK, in technical analysis terms, it's fine to buy here. If you already hold it, there is absolutely no reason to sell it now. If it drops below its 200 day moving average, then the picture changes.


Doesn't AQN look just as solid from a technical standpoint? Which one out of EMA, FTS and AQN is the least expensive at this point?


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## GizelleGizelle

June, 21 - $46.54 per share


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## pastorash

Bought some shares of EMA today at $46.50 for stable dividend income to join my FTS holding


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## 1980z28

pastorash said:


> Bought some shares of EMA today at $46.50 for stable dividend income to join my FTS holding


Nice ,,,I am holding 3700 shares,,,good luck,nice div


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## gardner

I am holding EMA, ENB and FTS in my "utilities" allocation, but I am underweight on EMA at the moment. I believe I might put some new money in to bring my EMA up to the same weighting as the others. I haven't added to my EMA since the TECO acquisition closed, though. I'm curious if folks have a feel for how the TECO thing is working out. The only news I can find is about the accident at one of the coal plants that killed several people.

The "new money" would be to convert some or all of the 4% debentures that I bought. They convert at 41.85 which is a good price, and would yield-to-cost almost 5% in dividends.

Q is whether I am missing an important downside on EMA.


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## My Own Advisor

Q is whether I am missing an important downside on EMA.

I don't see one personally. 

As long as we need electricity EMA will either continue to exist or get bought out for a premium by another utility player. So, long-term, as a shareholder - you win. 

It's also nice they have assets outside of Canada, international diversification built-in without an ETF


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## treva84

I hold EMA shares. I'm thinking about adding more; I believe EMA has one of the better valuations for the regulated utilities out there. Although they overpaid with the TECO acquisition is has essentially doubled the cash flow, which management will distribute to shareholders in the coming years - I believe they are targeting ~ 8% div growth, with management suggesting the next raise comes in October. Considering you can buy it at a div yield of 4.35% with a cash flow yield of nearly 11% I'd say it's a pretty good value. 

The biggest issue I see is debt - it's debt / equity at present is 2.19 (FTS = 1.64; CU = 1.69). There is some credit risk as well, FTS and CU sport A- credit ratings, EMA is BBB+. This is why it trades a bit cheaper, compared to it's peers.

Nonetheless, it's a regulated utility with fairly predictable cash flows. De-leveraging the balance sheet will increase shareholder equity and may lead to a credit upgrade, which would lead to a rising share price as well.


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## john.cray

I am looking at buying Emera in the near future. I just saw that they have released 14.6M new shares at price of $47.90 as per http://investors.emera.com/file.aspx?IID=4072693&FID=391365404

For my education (and hopefully others') - what are the pros and cons of participating in those new issues? How do investors normally feel about those? I understand that this will lead to dilution to the existing shareholders, right? In general what are the things that a newby investor should know about new issues?

Thank you for thoughts,
JC


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## AltaRed

Issuing new equity generally pisses me off since I don't necessarily trust that the capital raised will be put to truly accretive use. But then I guess I shouldn't have owned a piece of that business in the first place. 

FWIW, I don't participate in such issues. Maybe half the time, the market doesn't like it either and existing shares may trade lower temporarily while the market sorts out 'value'. If I really want to own that company, I buy the stock on the open market the day or two after the new issue when it might dip temporarily below the new issue price.


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## john.cray

Emera is down more than 3% today on otherwise good earnings report as far as I can tell. Current yield of 5.4%.

Another good buying opportunity?


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## Eder

This & Fortis...of course next month they may trade lower but I remember loading up on Fortis at $27 and that felt expensive. Great businesses at a decent price...fits the bill.


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## doctrine

Not all good news. Adjusted net earnings in 2017 were up 3% over 2016, if you exclude certain items from 2016 which drove 2016 profit higher. Hardly a ringing endorsement for a company that was at a P/E of 20 (now 17). By my calculation, dividend payout ratio out of adjusted net earnings has risen to 91%. They have just issued a crap load of shares in the last 2 years. 

Probably not a bad deal down here at $41.50, but it hardly deserves a premium over FTS. They will need time to show they can drive significant EPS growth, not just profit growth.


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## gibor365

doctrine said:


> Not all good news. Adjusted net earnings in 2017 were up 3% over 2016, if you exclude certain items from 2016 which drove 2016 profit higher. .


on the other hand
_Adjusted earnings, which exclude a $317 million charge for the revaluation of U.S. deferred taxes and $48 million in mark-to-market charges, was $137 million, or $0.64, up 32% from $104 million, or $0.51, in the fourth quarter of 2016._


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## john.cray

Added at $40.05


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## AltaRed

gibor365 said:


> on the other hand
> _Adjusted earnings, which exclude a $317 million charge for the revaluation of U.S. deferred taxes and $48 million in mark-to-market charges, was $137 million, or $0.64, up 32% from $104 million, or $0.51, in the fourth quarter of 2016._


Absolute numbers are meaningless when a company has been diluting equity. As Doctrine suggests, EPS growth is what it is all about.


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## humble_pie

AltaRed said:


> Absolute numbers are meaningless when a company has been diluting equity. As Doctrine suggests, EPS growth is what it is all about.



speaking of dilution, scotiabank will issue close to $1 billion in new shares when it comes to pay for just-announced acquisition of jarislowsky fraser.

BNS share price hasn't really blinked about it though


.


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## AltaRed

humble_pie said:


> speaking of dilution, scotiabank will issue close to $1 billion in new shares when it comes to pay for just-announced acquisition of jarislowsky fraser.
> 
> BNS share price hasn't really blinked about it though
> 
> 
> .


And it won't since in the same press release, they committed to buying back shares over 12-18 months to erase the effect of dilution. A smart move


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## humble_pie

AltaRed said:


> And it won't since in the same press release, they committed to buying back shares over 12-18 months to erase the effect of dilution. A smart move



companies commit to buying their own shares all the time. Often they never carry out.

if they are so gung-ho about non-dilution, why didn't they issue a preferred series at today's low rates - in the fact of possibly rising rates over next few years - in order to pay for the jarislowsky fraser acquisition


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## AltaRed

I think the fact they actually committed to a buyback rather than just a maybe makes the difference. Who knows why they chose commons over prefs...


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## humble_pie

AltaRed said:


> I think the fact they actually committed to a buyback rather than just a maybe makes the difference. Who knows why they chose commons over prefs...




they all definitely commit. Even when announcing a normal course issuer bid campaign, companies always state in writing that they are definitively going to do it. However there's usually some tiny print somewhere (not in the news release) about market conditions having to be favourable _et patati et patata._

whether they follow through is usually never noticed. I for one certainly do not keep an eye. Occasionally i have seen huge spats of insider trading & upon digging a bit further, these have turned out to be a company pursuing its previously announced course issuer.

all in all i like the JF deal. The landmark firm will be permitted to carry on with its independent name, team, branding & head office location. Even stephen jarislowsky himself, at 92 years of age, is expected to continue working.

can you imagine. A respected philanthropist. A multi-billionnaire. Still working at the age of 92. In his heyday, stephen jarislowsky was the piss-&-vinegar king of canadian finance, often standing up for minority shareholders & quite frequently launching class action suits in their name, which he nearly always won.

journalists adored stephen jarislowsky for his ripping quotes. It's possible he made up a few freshly acid sayings even before an interview, so he could interject them at intervals in order to keep the pop-eyed scribes on their toes.

one of his sayings is as true today as it ever was then. "Look, I'm just a poor humble businessman, what would I know" jarislowsky told me once, for a story on municipal shenanigans. "But we have got to get all these government costs in [fill in the blank] down."


.


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## Shaun8030

*Emera*

Emera has dropped to below 40 per share . What is the long term outlook on this company. I believe their financials reported recently were pretty bad . Should I buy more as the stock falls to lower my average cost or invest in a different utility ie Algonquin power. Note I already have Fortis but I want two utilities in my portfolio .


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## AltaRed

There are several other posts and a thread or two discussing Emera. Check the What Did you Buy thread for one.... And Distribution Hikes thread for another.

I am on record as saying...to the effect. Is EMA trying to be another ENB, i.e. upping the dividend instead of reducing debt? IOW, what the heck are they doing?


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## doctrine

They reduced their dividend growth guidance, and by implication their growth expectations. They had projected dividend growth of 8%/yr for the next few years, and reduced that to 4-5% - very likely because they did not see 8% as sustainable. 

Look at Fortis by comparison - FTS already has only been projecting 4-5% dividend growth. Why would Emera be growing that much faster than FTS? 

IMO, there are not many utilities out there that can grow at 10%/yr moving forward. It's only really possible if 50% or less of earnings are being retained and reinvested, and most utilities are paying out 70-80% or more of their earnings.


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## AltaRed

doctrine said:


> IMO, there are not many utilities out there that can grow at 10%/yr moving forward. It's only really possible if 50% or less of earnings are being retained and reinvested, and most utilities are paying out 70-80% or more of their earnings.


Bingo! And why are they paying out such high ratios? To attract dividend investors thereby pumping stock price so they can go to the markets in secondary offerings to buy yet another acquisition. 

That works if the company does not get into an ego trip and go too far, e.g. excessive leverage. When they do, e.g. ENB (as a blue chip) or a ponzi scheme like some oils did, the tide turns. Beware a company with relatively high D/E ratio at the same time they have a high dividend payout ratio.


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## dubmac

I did some research on Emera - this comes from a Mornigstar report from May 2018. Tho I better see the dangers that Alta & others have highlighted, I am kinda hopeful that there is an argument that this one is not wholly dependent to a regulated utility environment for it's cash. (Perhaps I am wearing rose-coloured glasses, and the author of this article should be focusing on marijuana stocks rather than ultilities - IDK :subdued

1. Emera has transitioned from a predominantly Canadian utility to one where a majority of earnings come from U.S. subsidiaries. Management made its boldest move yet in acquiring Teco Energy, paying a healthy premium for a regulated utility in constructive Florida...While Emera's Canadian utilities earn around 9% allowed returns, they typically enjoy lower costs of capital than U.S. counterparts....Strong results from Emera's unregulated operations resulted in regulated operations accounting for just 65% of earnings in 2015, resulting in management looking to the U.S. to reregulate its earnings profile.

2. Growth prospects are strong for Emera, with the estimated $1.5 billion of investment for the company's moaty Maritime Link and Labrador transmission projects, helping to bring projects satisfying renewable portfolio requirements and support above-average dividend growth. Similar to its regulated peers in Florida, Teco Energy expects to invest roughly $800 million for 600 megawatts in solar development in the region, with regulators providing automatic solar base rate adjustments upon completion with a 10.25% allowed return on equity. Beyond 2020, management is looking for an additional 600 MW of solar investment, confirming our view that there is a very long runway of solar generation opportunities in a state where less than 1% of total generation came from solar in 2017.

3. The negative cash flow impact from U.S. tax reform is estimated to be $75 million-$125 million in 2018. Management now expects minimal cash flow impact from tax reform beyond 2018, offset by alternative minimum tax refunds and additional capital investment opportunities.

4. Emera's key risk to future earnings is regulatory uncertainty... Unlike its pure U.S. peers, Emera's results are affected by current exchange rate fluctuations. In 2017, roughly 60% of the company's earnings were attributed to the U.S. Earnings will be subject to fluctuations between the U.S. dollar and Canadian dollar. As with all regulated utilities, Emera faces the risk of an inflationary environment that would raise borrowing costs and make other investments more attractive for income-seeking investors.


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## AltaRed

I am not suggesting EMA is not a blue chip investment opportunity. Only that its most recent behaviour, i.e. a dividend increase, is counter-productive to its long term growth prospects, especially with current debt levels and interest rate uncertainties. I don't know the fiscal terms of its Maritime Link project but I sure hope they locked in some transmission, e.g. take-or-pay, guarantees to protect their investment. It's a bold move that may pay off, but large Maritime projects have a history of imploding. Their Teco US investment is probably the building block of their future, as long as Florida doesn't disappear via hurricane, rising sea levels, etc. I might have owned EMA if I didn't already have CU and FTS.


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## james4beach

Once one gets to the point of owning FTS & CU and considering another one, does it then just make sense to buy the whole sector using ZUT?

Utilities suffer very strongly from this irrational dividend hype we are in, and it warps management's decision making. Maybe best to diversify across a bunch of them.


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## like_to_retire

james4beach said:


> Once one gets to the point of owning FTS & CU and considering another one, does it then just make sense to buy the whole sector using ZUT?
> 
> Utilities suffer very strongly from this irrational dividend hype we are in, and it warps management's decision making. Maybe best to diversify across a bunch of them.


Once you own FTS, CU and EMA you will track ZUT without the MER. Why pay someone for doing nothing?

ltr


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## Eder

And why own basket case utilities like TransAlta? Much better to cherry pick utilities with superior management.


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## AltaRed

Agreed. One doesn't need more than about 10-15 stocks for their Canadian equity allocation. Given 7-8 useful sectors out of 11, that is ~2 stocks in each, perhaps 3 in select cases.


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## 1980z28

If one is finished working life and looking for income
I for one has owned fts ,ema ,aqn for a long time
Still collect ema with dividends reinvested
If one is still working and has a way to go,you can explore other risk rewards investing,,,


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## My Own Advisor

like_to_retire said:


> Once you own FTS, CU and EMA you will track ZUT without the MER. Why pay someone for doing nothing?
> 
> ltr


+1 Simply add in BIP as well to that mix but yes, agree.


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## dubmac

Emera had a nice bump on Nov 9th. Earnings came in. 
one of the nicer surprises in the pf during what was a pretty dismal past month for most others.


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## My Own Advisor

Still a great time to buy beaten up utilities....EMA, FTS, CU, BIP, etc.


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## Ponderling

yes, ema, fts, and atx is our stand in utilities for Canadian equities. EMA has a complex structure on reading its annual report, but I don't really care how they make the sausage, the dividends still come out.


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## newfoundlander61

Regulator asks Emera to cut shareholder returns for 'grossly overestimated' Maritime Link benefits

https://www.cbc.ca/news/canada/nova...ly-inflating-maritime-link-benefits-1.5822212


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## Raggedy Dandy

https://nz.finance.yahoo.com/news/emera-inc-nova-scotia-power-162500071.html



Down 5% on this, bringing its YTD decline more or less even with FTS...


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## AltaRed

An example of political expediency which is counter to what Nova Scotia really needs. Emera proposes to do the right thing.....essentially cut back funding to Nova Scotia Power and re-direct its capital investment elsewhere.


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