Is Emera stock a buy before its proposed merger with Canadian Utilities? A reliable dividend and the prospect of a much larger utility business make Emera stock worth watching before the merger. Published October 13, 5:00 pm EDT [You're reading a Fool.ca free article. Go to your Premium Motley Fool experience to see member-only content.] Key Points * Emera stock has declined recently, but its 4.5% dividend yield remains attractive for income investors. * The proposed merger could create a $72 billion energy giant with strong long-term growth opportunities. * Despite regulatory uncertainties, the merger could strengthen Emera's earnings potential and support future dividend growth. I usually don't expect utility stocks to go ahead with major corporate shake-ups. Most of the time, I'm happy even if a defensive utility firm keeps investing in its infrastructure, growing earnings, and sending me a dividend every quarter. But Emera (TSX: EMA) seems on a path toward something much bigger. It recently announced a merger with Canadian Utilities (TSX: CU), a subsidiary of ATCO (TSX: ACO.X). As part of the deal, ATCO's industrial services businesses will be spun off into a separate company, while the combined Emera-Canadian Utilities business is expected to have an enterprise value of about $72 billion and serve roughly six million customers. That's a massive change for a utility firm investors have traditionally looked to for stability and dividend income. Let's take a closer look at Emera's fundamentals and what the proposed merger could mean for its future, and whether EMA stock is worth buying before the deal closes. Why Emera stock is worth watching. Before diving deeper into merger details, let's quickly look at Emera's existing business and dividend. This Halifax-based company mainly operates regulated electricity and natural gas utilities, including Tampa Electric in Florida and Nova Scotia Power. At the time of writing, EMA stock traded at $65.20 per share with a market cap of $20.1 billion. Despite its improving fundamentals, the company's shares have lost 11% in six months, making it look undervalued based on its long-term outlook. Emera still offers an attractive 4.5% annualized dividend yield and has been raising dividends for 20 straight years. In the second quarter of 2026, Emera's adjusted net profit fell about 10% year-over-year (YoY) to $212 million. This decline was partly because of higher interest expenses, foreign exchange losses, weaker earnings at New Mexico Gas, and the sale of Grand Bahama Power. Nevertheless, the company's first-half adjusted net profit grew about 2% YoY to $627 million, while its operating cash flow before working capital improved by 8%. The company also invested more than $1.7 billion in infrastructure during the first half and continues to target average adjusted earnings-per-share growth of 5% to 7% through 2030. How the merger could strengthen Emera. Beyond Emera's existing operations, Canadian Utilities could give it a larger growth opportunity. Under the deal announced earlier this month, Emera plans to merge with Canadian Utilities, a subsidiary of ATCO, through an all-share transaction. As part of this arrangement, ATCO's industrial services businesses will be spun off into a separate publicly traded company called New ATCO. Existing Emera shareholders are expected to own about 60% of the combined utility business, which will continue operating under the Emera name. The merged company is expected to have an enterprise value of about $72 billion, a $45 billion rate base, and roughly six million customers. More importantly, around 95% of its earnings would come from regulated utilities, with about 80% generated in Florida and Alberta. This strong focus on regulated operations in two high-growth markets could provide Emera with a solid foundation for steady earnings and dividend growth in the years to come. In addition, the combined company's planned $32 billion capital program through 2030 is expected to drive annual rate base growth of 7% to 8%. Canadian Utilities already brings encouraging results to the table. The company's second-quarter adjusted earnings rose nearly 16% YoY. Its fully contracted $2.9 billion Yellowhead Pipeline project has also received key regulatory approvals. Should investors buy EMA stock before the deal closes? After getting all approvals, the Emera-Canadian Utilities merger deal is likely to close in the third or fourth quarter of 2027. Meanwhile, Emera plans to outline its 2027 to 2031 capital and funding plan on November 6. For long-term income investors, I think Emera looks attractive at its current price. Its 4.5% yield offers income today, while the merger could give it additional earnings opportunities over time. Although the deal isn't guaranteed, investors would still own an established regulated utility business while waiting for the outcome.

Nova Scotia Power applies to securitize utility assets. Could it save Nova Scotians money? Published Oct 09, 2026 Last updated 49 minutes ago Tim Houston said his government removed politics from the discussion when it approved regulations that enabled Nova Scotia Power to apply to the Nova Scotia Energy Board for authority to securitize utility assets. "Our only objective is to protect ratepayers and, as such, I have agreed to give the professionals at the board the space and authority to conduct a formal process and determine if it is truly in the best interest of ratepayers," said the premier and energy minister in a statement to the media. "This should be a factual, objective decision." Story continues below This advertisement has not loaded yet, but your article continues below. Under the new financing orders and securitized bonds regulations, Nova Scotia Power filed an application with the Nova Scotia Energy Board (NSEB) on Friday for the authority to securitize utility assets. Securitization is a financing mechanism that allows the recovery of approved costs at a lower interest rate and over a longer time period, lowering costs for customers. Houston, NSP on securitization, decision. Houston expanded on how securitization works and the role of the NSEB in a post on his Facebook account. "The independent Energy Board has identified another potential way to save Nova Scotians money. It is called securitization," reads the post. "The name sounds complicated, but the idea is pretty simple. It could allow certain electricity costs to be financed at lower interest rates (remortgaged), potentially saving ratepayers money. "The board believes it is worth exploring. I agree. But before anything happens, we need to know whether it will actually benefit Nova Scotians and save them money. So today, I agreed to give the independent energy board the authority and space to examine it fully and properly, look at all the facts and determine whether it is in the best interests of ratepayers." Story continues below This advertisement has not loaded yet, but your article continues below. Nova Scotia Power says if the plan is approved, it would reduce pressure on customer rates by lowering borrowing costs and spreading repayment over a 30-year period. "Originally proposed and supported as part of Nova Scotia Power's most recent general rate application, the proposed plan would allow up to $1 billion in eligible costs to be financed using a lower-cost method called securitization," states Nova Scotia Power on its website. "Securitization is a proven financial tool that has been used in other jurisdictions to lower costs for customers by enabling lower interest rates and longer repayment terms." Nova Scotia Power states that the proposed framework is expected to save customers approximately $265 million over the full 30-year repayment period. On Tuesday, Emera Inc., the parent company of Nova Scotia Power, joined forces with Calgary-based Canadian Utilities Ltd. in a blockbuster deal that will create one of North America's largest utilities. This advertisement has not loaded yet. This advertisement has not loaded yet, but your article continues below. The companies will become a top 20 North American utility, forming a combined company valued at $72 billion and serving six million customers across Canada, the United States and international markets. Changes to Public Utilities Act facilitates move. New regulations under the Public Utilities Act were approved on Thursday by the Executive Council of Nova Scotia, which facilitated Nova Scotia Power's filing to the NSEB. "Every aspect of an application to the energy board will be scrutinized to ensure that this approach is in the best interests of Nova Scotians," reads a news release from the province. "These regulations are another part of the government's plan to help shield Nova Scotians from sudden and significant rate increases." NDP says decision a complete reversal. NDP leader Claudia Chender met the announcement with skepticism. Story continues below This advertisement has not loaded yet, but your article continues below. "When it comes to Nova Scotia Power, the hits that people are expected to take just keep coming. "Energy Minister Tim Houston is now making Nova Scotians pay Nova Scotia Power a $1 billion bailout for retiring coal power assets early. The news today means that Nova Scotians will be paying an additional charge on their energy bills that will last for up to 30 years." Chender added that next year, Nova Scotia families will see a 2.9 per cent increase. "This extra cost should be paid for by Nova Scotia Power, not by Nova Scotians forced to be their customers," she said. "The financial loss should be theirs, not Nova Scotians." The government's announcement is a complete reversal from the premier's previous comments to reject a bailout, said Chender. "During the most recent general rate application hearings, his own energy department said that Nova Scotia Power shareholders should shoulder the cost of retiring coal power plants early. Instead of taking that advice, the energy minister is dumping that extra cost on Nova Scotians who are already seeing their power bills soar." Story continues below This advertisement has not loaded yet, but your article continues below. Liberal leader skeptical. Interim Liberal Leader Iain Rankin said in a response to the announcement that securitization doesn't erase the costs. "After 10 months of delay, the premier is finally moving on a measure that could help manage costs for ratepayers," Rankin said in a news release. "But securitization changes how those costs are paid, it doesn't erase them, and the delay risks costing Nova Scotians more." In the news release, the province touted the creation of the Independent Energy System Operator, advancement of the clean power plan, restructuring of the NSEB, and introduced legislation to review performance-based regulation. Rankin said more work needs to be done by the government and that delays have real cost implications for ratepayers. "The government's Green Choice Program, intended to bring new wind projects online, has lost four of its six originally selected projects, delaying new clean electricity," said Rankin. "The premier also failed to secure the federal support sought for the Atlantic Loop, while critical transmission infrastructure needed to access more affordable, reliable power remains a priority. "Nova Scotians deserve a credible plan to transition off coal by 2030 without driving up power bills. The premier, who has once again appointed himself energy minister, should have been there today to explain why he has reversed his position on securitization, an approach he once so aggressively opposed, and how his government will prevent its delays from costing Nova Scotians more." This advertisement has not loaded yet. Quick Picks