Emera vs Fortis Which Should You Buy?

Emera and Fortis are two renowned utility companies in North America, each with a strong presence in the energy sector. Both companies have a substantial market capitalization and a history of providing consistent returns to investors. However, there are differences in their business models and geographic footprint. Emera is known for its focus on renewable energy and sustainable practices, while Fortis has a diversified portfolio of electric and gas utilities. Investors should carefully consider these factors when assessing the potential of Emera vs Fortis stocks for their investment portfolio.

Emera or Fortis?

When comparing Emera and Fortis, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Emera and Fortis.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Emera has a dividend yield of 4.72%, while Fortis has a dividend yield of 2.77%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Emera reports a 5-year dividend growth of 0.13% year and a payout ratio of 80.24%. On the other hand, Fortis reports a 5-year dividend growth of 4.81% year and a payout ratio of 48.41%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Emera P/E ratio at 21.59 and Fortis's P/E ratio at 18.78. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Emera P/B ratio is 1.30 while Fortis's P/B ratio is 1.39.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Emera has seen a 5-year revenue growth of -0.08%, while Fortis's is 0.15%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Emera 's ROE at 6.06% and Fortis's ROE at 7.48%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $39.40 for Emera and $44.31 for Fortis. Over the past year, Emera 's prices ranged from $32.00 to $40.00, with a yearly change of 25.00%. Fortis's prices fluctuated between $36.86 and $46.06, with a yearly change of 24.96%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.