Critical Analysis: Equatorial Energia (OTCMKTS:EQUEY) & Emera (OTCMKTS:EMRAF)

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

Dividends

Equatorial Energia pays an annual dividend of $0.07 per share and has a dividend yield of 1.4%. Emera pays an annual dividend of $1.45 per share and has a dividend yield of 3.9%. Equatorial Energia pays out 29.7% of its earnings in the form of a dividend. Emera pays out 73.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation and Earnings

This table compares Equatorial Energia and Emera”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equatorial Energia	N/A	N/A	N/A	$0.25	21.60
Emera	N/A	N/A	N/A	$1.97	19.15

Emera is trading at a lower price-to-earnings ratio than Equatorial Energia, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and target prices for Equatorial Energia and Emera, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equatorial Energia	0	0	0	0	0.00
Emera	0	0	1	0	3.00

Emera has a consensus price target of $54.00, suggesting a potential upside of 43.50%. Given Emera’s stronger consensus rating and higher possible upside, analysts clearly believe Emera is more favorable than Equatorial Energia.

Profitability

This table compares Equatorial Energia and Emera’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equatorial Energia	N/A	N/A	N/A
Emera	N/A	N/A	N/A

Institutional and Insider Ownership

0.0% of Equatorial Energia shares are held by institutional investors. Comparatively, 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 stock is poised for long-term growth.

Summary

Emera beats Equatorial Energia on 6 of the 8 factors compared between the two stocks.

About Equatorial Energia

Equatorial Energia S.A., through its subsidiaries, engages in the electricity generation, distribution, transmission, and sanitation operations in Brazil. It operates through Distribution, Transmission, Wind Generation, Services, Sanitation, and Other segments. The company generates energy from wind, solar, biomass, qualified co-generation, and hydroelectric plants. It also distributes electric energy in the 217 municipalities of Maranhão State with a concession area of approximately 332,000 square kilometers serving approximately 2.5 million consumers; and 144 municipalities of Pará State with a concession area covering 1,248,000 square kilometers serving approximately 2.6 million consumers. In addition, the company distributes electric energy to 224 municipalities of Piauí State with a concession area covering 251,000 square kilometers serving approximately 1.3 million consumers; 102 municipalities of Alagoas State with a concession area covering 27,848 square kilometers serving approximately 1.2 million consumers; 16 municipalities of Amapá State serving approximately 209,000 consumers; and 72 municipalities of Rio de Janeiro State serving approximately 1.8 million consumers. Equatorial Energia S.A. was founded in 1958 and is based in Brasília, Brazil.

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.