Finding a monthly dividend stock is getting into the best of the best. These provide a steady and predictable income stream, which is particularly helpful for retirees or anyone looking to supplement their monthly budget.
Unlike quarterly dividends, monthly dividends align better with most people’s regular expenses, making it easier to manage cash flow. Plus, reinvesting these dividends can compound your returns more frequently, potentially growing your investment faster over time. It’s like getting a regular paycheque from your investments, adding an extra layer of financial security and flexibility to your portfolio. So, let’s get into one every investor should consider.
Emera
Emera (TSX:EMA) is a solid choice for investors who are looking for stability and steady income, especially in the utility sector. As a leading energy and services company based in Canada, Emera operates across North America with a focus on clean energy and reliable power delivery. What makes Emera particularly appealing is its consistent track record of dividend payments. This is a key draw for income-focused investors. With a strong commitment to renewable energy and a diversified portfolio, Emera is well-positioned to continue providing stable returns even in uncertain market conditions.
Furthermore, Emera’s stock is known for its relatively low volatility compared to more growth-oriented sectors. This makes it a less risky option for those who prioritize capital preservation along with income. The company has a history of increasing its dividends, offering investors the potential for growing income over time. This combination of reliable dividends and a focus on sustainable energy solutions makes Emera a strong candidate for long-term, income-seeking investors. Especially those who want to add some stability to their portfolios.
Into earnings
Emera’s recent earnings report for Q2 2024 provided a mixed bag of results that investors should take note of. On the positive side, Emera saw a substantial increase in reported net income per share, jumping from $0.10 in Q2 2023 to $0.45 in Q2 2024. This was largely thanks to a gain from the strategic sale of their Labrador Island Link (LIL) equity interest. Additionally, their Florida operations, particularly Tampa Electric and Peoples Gas, performed well, benefiting from robust customer growth and new base rates. This helped to bolster overall earnings.
However, it wasn’t complete perfection. Emera’s adjusted earnings per share (EPS) actually decreased to $0.53 from $0.60 in the same quarter last year, driven by higher corporate costs. This included increased interest expenses and losses from foreign exchange translations. Earnings from Nova Scotia Power and New Mexico Gas Company were also down due to higher operating costs and investments in reliability. Despite these challenges, Emera is actively working on strengthening its balance sheet and remains committed to its $2.9 billion capital deployment for the year, which is expected to support future growth.
Still valuable
Emera stock remains a valuable option for investors due to its combination of strong financial fundamentals and attractive dividend yield. Trading at around $50.75 with a forward Price/Earnings (P/E) ratio of 17.8, Emera offers a reasonable valuation, particularly given its stability in the utility sector. The company’s market cap stands at a solid $14.6 billion, with a consistent operating margin of 12.2%. This highlights its ability to generate steady income. Furthermore, Emera’s quarterly revenue growth of 14% year-over-year and a significant 234% growth in quarterly earnings demonstrate its robust performance despite economic challenges.
One of the standout features of Emera for income-focused investors is its forward annual dividend yield of 5.6%, with a reliable dividend history. Although the payout ratio is high at 110.6%, which may raise some concerns, the company’s strong operating cash flow of $2.5 billion suggests it has the resources to maintain its dividends. Additionally, with a book value per share of $38.59, investors are buying into a company with solid assets backing its stock price. All these factors make Emera a strong option for those looking for a stable, income-generating investment in a diversified portfolio.
