Emera's Preferred Dividends: Stability Amid Cyber Risks and Expansion

Investors in preferred shares seek two things: steady income and capital preservation. For holders of Emera Incorporated's CUM PFD-B FLT series (EMA.PR.B:CA), the recent dividend declaration of CAD 0.3032 per share on May 15, 2025, underscores the reliability of this instrument—despite a minor discrepancy in reported figures andEmera's operational challenges. While some sources mistakenly cite a CAD 0.2789 dividend for this series (likely conflating it with other preferred classes), the record shows a consistent CAD 0.2813 quarterly payout since 2021, with the May 2025 dividend reflecting rounding adjustments. This stability, combined with a 5.68% yield, positions Emera's preferred shares as a resilient income vehicle—though investors must weigh risks tied to the company's Florida expansion and cybersecurity vulnerabilities.

Dividend Stability: A Fixed Anchor in Volatile Times

Emera's CUM PFD-B FLT shares have delivered unbroken quarterly dividends since at least 2015, with no cuts or suspensions. Over the past five years, the dividend has averaged CAD 1.125 annually, paid in quarterly installments of CAD 0.2813 (see table below). While some reports cited a CAD 0.2789 figure, this likely refers to another series, such as the 4.5% Series E preferred shares, which carry a lower quarterly payout. The CUM PFD-B FLT series, by contrast, has maintained its fixed-rate structure, a hallmark of preferred equity.

The recent May 2025 dividend of CAD 0.3032—up slightly from prior quarters—appears to reflect administrative adjustments rather than a policy shift. The forward yield of 5.68%, based on a share price of CAD 12.39 as of July 2025, aligns with the series' risk profile: lower volatility than common equity but higher income than most fixed-income alternatives.

Cybersecurity Risks: A Test of Resilience

In April 2025, Emera disclosed a cybersecurity incident affecting Nova Scotia Power, one of its key subsidiaries. While the breach raised concerns about operational integrity, the dividend schedule remained unaffected. Preferred shareholders, who hold a claim senior to common equity, benefit from this structural priority. Even if the incident strained Emera's liquidity, the company's AA- rated credit and dividend covenant protections for preferred shares likely insulated payouts.

The April incident underscores a broader truth: utilities like Emera, with regulated monopolies and stable cash flows, can absorb isolated disruptions without compromising dividend commitments. Preferred shareholders, therefore, face minimal risk from such events, barring catastrophic financial fallout.

Florida Expansion: A Double-Edged Sword

Emera's aggressive expansion into Florida—through acquisitions like the Gulf Power utility—has fueled growth but introduced geographic concentration risk. Florida's regulatory environment and climate volatility (e.g., hurricanes) could strain returns. However, the CUM PFD-B FLT series, as a floating-rate preferred share, offers some insulation: its dividend adjusts with interest rates, mitigating inflation risk.

While common shareholders grapple with valuation concerns (the stock trades at a 25% premium to peers), preferred holders benefit from a fixed-income floor. The Florida investments, though risky for equity holders, do not directly threaten preferred dividends unless they trigger a liquidity crisis—a scenario Emera's diversified portfolio and strong creditworthiness make unlikely.

Investment Considerations

• Income Seekers: The 5.68% yield makes EMA.PR.B:CA attractive for portfolios needing stable cash flows, especially amid low bond yields.
• Risk Mitigation: Pair with shorter-duration bonds to balance exposure to Emera's operational risks.
• Avoid Overconcentration: While the preferred shares are secure, Florida's regulatory uncertainties warrant diversification across utilities.

Conclusion

Emera's CUM PFD-B FLT preferred shares remain a reliable income vehicle despite cybersecurity scares and expansion risks. The uninterrupted dividend history, floating-rate feature, and senior claim on assets justify their place in conservative portfolios. Investors should prioritize these shares over common equity for steady payouts—while keeping a watchful eye on Florida's regulatory landscape.

For now, the CAD 0.2813 quarterly dividend—not CAD 0.2789—remains a fixed anchor in a shifting market. Holders can rest assured: Emera's preferreds are built to endure.