Emera Inc. (TSX:EMA)(NYSE:EMA) recently announced that it would be raising its quarterly dividend by 1% to $0.7325 per share, marking the utility’s 19th straight annual increase. While modest, the hike aligns with Emera’s strategy of steady returns, supported by projected 7-8% rate base growth through 2029 and 5-7% expected EPS growth through 2027.
The new annual payout of $2.93 offers a dividend yield of 4.3%, which is well above average. The average stock in the S&P 500 yields just 1.2%. However, Emera’s trailing 12-month EPS stands at $2.95, putting the payout ratio near 100% and suggesting limited room for aggressive future increases unless earnings improve significantly. This marks the second consecutive year of only a 1% increase in the dividend, and this could be the norm moving forward given its tight payout ratio.
Emera serves 2.5 million customers through six utilities across Canada, the U.S., and the Caribbean, with $39 billion in assets. It is continuing to grow, however, as it has a $20 billion capital plan through 2029 which targets infrastructure upgrades and energy transition efforts.
The market has responded positively in 2025, with shares rising 26% year-to-date, outperforming many utility peers. Still, the stock’s five-year return of 22% reflects slower historical growth and sector headwinds. And at a price-to-earnings ratio of 23, Emera trades at a premium, which could mean limited upside in the near term.
If your priority is just to collect a high yield, Emera can be a great option for your portfolio. However, don’t expect large dividend increase in the future, even with the stock having a fairly long streak.
