Analyzing Hydro One (OTCMKTS:HRNNF) & Emera (OTCMKTS:EMRAF)

Emera (OTCMKTS:EMRAF) and Hydro One (OTCMKTS:HRNNF) are both utilities companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Analyst Ratings

This is a breakdown of current ratings and price targets for Emera and Hydro One, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Emera	0	2	2	0	2.50
Hydro One	0	5	1	0	2.17

Dividends

Emera pays an annual dividend of $1.45 per share and has a dividend yield of 3.2%. Hydro One pays an annual dividend of $0.95 per share and has a dividend yield of 2.3%. Emera pays out 73.8% of its earnings in the form of a dividend. Hydro One pays out 126.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Emera is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Emera and Hydro One”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Emera	N/A	N/A	N/A	$1.97	23.11
Hydro One	$6.47 billion	3.84	$958.29 million	$0.75	55.25

Hydro One has higher revenue and earnings than Emera. Emera is trading at a lower price-to-earnings ratio than Hydro One, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Emera and Hydro One’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Emera	N/A	N/A	N/A
Hydro One	14.82%	10.77%	3.55%

Insider and Institutional Ownership

23.8% of Emera shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Emera beats Hydro One on 6 of the 11 factors compared between the two stocks.

About Emera

Emera Incorporated, through its subsidiaries, engages in the generation, transmission, and distribution of electricity to various customers. The company operates through Florida Electric Utility, Canadian Electric Utilities, Other Electric Utilities, Gas Utilities and Infrastructure, and Other segments. It generates electricity through natural gas, solar, hydroelectricity, coal, and biomass power plants. The company is also involved in the purchase, transmission, distribution, and sale of natural gas; and the provision of energy marketing, trading, and other energy asset management services. In addition, it transports re-gasified liquefied natural gas from Saint John, New Brunswick to consumers in the northeastern United States through its 145-kilometer pipeline. As of December 31, 2023, the company’s electric utilities served approximately 840,000 customers in West Central Florida; 549,000 customers in Nova Scotia; 134,000 customers in the island of Barbados; 19,000 customers in the Grand Bahama Island; and gas utilities and infrastructure served approximately 490,000 customers across Florida and 540,000 customers in New Mexico. The company was incorporated in 1998 and is headquartered in Halifax, Canada.

About Hydro One

Hydro One Limited, through its subsidiaries, operates as an electricity transmission and distribution company in Ontario. The company operates through three segments: Transmission, Distribution, and Other. It owns and operates approximately 30,000 circuit kilometers of high-voltage transmission lines and approximately 125,000 circuit kilometers primary low-voltage distribution lines. The company serves residential, small business, commercial, and industrial customers, as well as municipal utilities. It also provides telecommunications support services for its transmission and distribution businesses; and information and communications technology services and solutions. The company was incorporated in 2015 and is headquartered in Toronto, Canada.