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Companhia Energetica Minas Gerais (CIG)
:CIG
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Companhia Energetica Minas Gerais
(NYSE:CIG)
80Outperform
Positive Factors
Dividends
The one-offs in the net income could result into +4% additional dividend yield in 2024.
Privatization
The privatization process is the main upside risk.
Negative Factors
Operational Performance
Cemig reported soft operational results with Adj. EBITDA at R$1.6bn, down 10% YoY and 4% below estimates.
Companhia Energetica Minas Gerais (CIG) vs. S&P 500 (SPY)
Market Cap
$6.19B
Dividend Yield9.76%
Average Volume (3M)2.03M
Price to Earnings (P/E)3.6
Beta (1Y)0.49
Revenue Growth3.39%
EPS Growth46.79%
CountryUS
Employees4,917
SectorUtilities
Sector Strength86
IndustryRegulated Utilities
Share Statistics
EPS (TTM)0.53
Shares Outstanding1,905,179,900
10 Day Avg. Volume2,776,315
30 Day Avg. Volume2,032,596
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)N/A
Price to Sales (P/S)0.86
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.60Price Target Upside36.13% Upside
Rating ConsensusHold
Number of Analyst Covering1
Companhia Energetica Minas Gerais Business Overview & Revenue Model
Company DescriptionCompanhia Energetica de Minas Gerais (CIG), commonly known as CEMIG, is a Brazilian energy company headquartered in Belo Horizonte, Minas Gerais. It operates in the electricity sector and is involved in the generation, transmission, and distribution of electricity. CEMIG is one of the largest energy utilities in Brazil and provides a wide range of services across the energy supply chain, including the development and implementation of renewable energy projects.
How the Company Makes MoneyCEMIG makes money primarily through the generation, transmission, and distribution of electricity. The company owns and operates a vast network of hydroelectric, thermal, and wind power plants, which allows it to generate electricity that it sells to residential, commercial, and industrial customers. Revenue is also generated through the provision of electricity distribution services, where CEMIG manages and maintains the infrastructure necessary to deliver electricity to end-users. Additionally, CEMIG earns income from its transmission operations by managing high-voltage power lines that transport electricity over long distances. The company may also engage in strategic partnerships and government contracts that enhance its operational capabilities and financial performance.
Companhia Energetica Minas Gerais Financial Statement Overview
Summary
Companhia Energetica Minas Gerais exhibits strong financial health with robust profitability, efficient capital use, and solid cash generation. The company has demonstrated significant revenue growth, although the decline in free cash flow growth requires attention. Overall, the financial position is sound, with a balanced approach to leverage and strong returns on equity.Income Statement
The income statement shows strong profitability with a TTM gross profit margin of 23.31% and a net profit margin of 32.28%. The company has demonstrated impressive revenue growth, increasing from 2022 to TTM by 195.44%. The EBIT margin is robust at 0.05% for TTM, indicating efficient operations.87
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.52, indicating a manageable level of debt. The return on equity (ROE) is impressive at 11.71% for TTM, suggesting efficient use of equity capital. The equity ratio is solid at 44.52%, showing a healthy balance between liabilities and equity.78
Positive
Cash Flow
The cash flow statement indicates strong cash generation with a free cash flow growth rate of -30.18% from 2022 to TTM, which requires monitoring. The operating cash flow to net income ratio is 2.87 for TTM, highlighting strong operational cash conversion. The free cash flow to net income ratio is 1.14, indicating solid free cash flow generation relative to net income.81
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 10.18T | 36.85B | 34.46B | 33.65B | 25.23B | 25.39B | Gross Profit |
| 2.37T | 6.82B | 6.81B | 6.72B | 5.38B | 5.79B | EBIT |
| 5.18B | 5.88B | 5.69B | 5.96B | 4.94B | 4.86B | EBITDA |
| 1.75T | 8.88B | 5.48B | 6.82B | 5.70B | 6.75B | Net Income Common Stockholders |
| 3.28T | 5.76B | 4.09B | 3.75B | 2.86B | 3.13B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.48B | 3.13B | 4.24B | 4.05B | 5.30B | 2.36B | Total Assets |
| 60.34B | 55.00B | 53.67B | 52.05B | 54.08B | 49.93B | Total Debt |
| 14.77B | 10.26B | 10.94B | 11.61B | 15.25B | 15.06B | Net Debt |
| 13.88B | 8.73B | 9.49B | 10.78B | 13.57B | 14.53B | Total Liabilities |
| 44.26B | 30.34B | 31.89B | 32.58B | 36.60B | 34.87B | Stockholders Equity |
| 14.72B | 22.79B | 21.78B | 19.46B | 17.47B | 15.05B |
| Cash Flow | Free Cash Flow | ||||
| 3.76B | 5.38B | 6.32B | 3.45B | 8.43B | 109.00M | Operating Cash Flow |
| 9.44B | 6.64B | 6.61B | 3.69B | 8.61B | 2.04B | Investing Cash Flow |
| -5.80B | -3.97B | -3.21B | 1.37B | -5.08B | -1.19B | Financing Cash Flow |
| -2.30B | -2.58B | -2.79B | -5.91B | -2.39B | -1.20B |
Companhia Energetica Minas Gerais Technical Analysis
Positive
1.91
Price Trends
1.85
Positive
1.88
Positive
1.87
Positive
Market Momentum
0.01
Positive
55.42
Neutral
70.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIG, the sentiment is Positive. The current price of 1.91 is below the 20-day moving average (MA) of 1.92, above the 50-day MA of 1.85, and above the 200-day MA of 1.87, indicating a bullish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 55.42 is Neutral, neither overbought nor oversold. The STOCH value of 70.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CIG.
Companhia Energetica Minas Gerais Risk Analysis
Companhia Energetica Minas Gerais disclosed 60 risk factors in its most recent earnings report. Companhia Energetica Minas Gerais reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Companhia Energetica Minas Gerais Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.19B | 3.57 | 31.64% | 9.76% | 3.39% | 46.79% | |
77 Outperform | $91.39B | 20.71 | 9.10% | 3.57% | 4.46% | 54.09% | |
77 Outperform | $15.65B | 8.10 | 8.91% | 2.96% | 2.94% | 191.13% | |
74 Outperform | $36.64B | 19.80 | 8.44% | 3.25% | 4.23% | -27.02% | |
73 Outperform | $152.28B | 21.95 | 14.24% | 2.90% | 26.91% | -6.43% | |
65 Neutral | $11.95B | 15.57 | 6.50% | 4.41% | 7.00% | 0.55% | |
63 Neutral | $8.53B | 4.99 | 39.65% | 5.78% | -3.14% | 563.59% |
* Utilities Sector Average
Performance Comparison
CIG
Companhia Energetica Minas Gerais
1.94
0.42
27.63%
ED
Consolidated Edison
104.57
18.89
22.05%
DUK
Duke Energy
118.21
26.70
29.18%
NEE
NextEra Energy
72.73
14.82
25.59%
AES
AES
12.28
-2.08
-14.48%
EBR
Centrais Eletricas Brasileiras SA - Eletrobras
6.85
-1.69
-19.79%
Companhia Energetica Minas Gerais Earnings Call Summary
Earnings Call Date: Nov 13, 2024 | % Change Since: -1.04% | Next Earnings Date: Mar 20, 2025
Earnings Call Sentiment Positive
The earnings call was largely positive, highlighting significant financial achievements, strong revenue growth, and strategic successes in divestments and tariff revisions. However, challenges in energy trading and a drop in recurring EBITDA were notable lowlights.Highlights
Record-Breaking AAA Rating
Achieved the best rating in the company's history, AAA, showcasing significant financial turnaround and stability.
Strong Financial Performance
Recorded a capital gain of BRL 1.6 billion from the sale of Aliança Energia, contributing to the highest EBITDA in history at BRL 5 billion for Q3.
Significant Revenue Growth
Achieved nearly 20% growth compared to Q3 2023, with investments over BRL 4 billion so far in 2024, exceeding last year's BRL 4.8 billion.
Transmission Tariff Revision Success
Received a gain of BRL 1.5 billion from transmission tariff revision, enhancing financial outcomes.
Successful Debenture Issuance
Issued BRL 2.5 billion in debentures with strong market demand, improving debt profile and extending average maturity.
Recognition for Transparency
Awarded for being one of the most transparent companies in Brazil, emphasizing quality and quick information to investors.
Lowlights
Challenges in Energy Trading
Trading results negatively impacted by load restrictions between Northeast and Southeast, affecting energy price differences and requiring contract renegotiations.
Drop in Recurring EBITDA
Recurring EBITDA experienced a 10% drop due to adverse trading conditions and increased outsourced service costs.
Company Guidance
In the third quarter of 2024, Cemig achieved remarkable financial results, highlighted by an EBITDA of BRL 5 billion, marking the highest in the company's history. This success was bolstered by a capital gain of BRL 1.6 billion from the sale of Aliança Energia and a BRL 1.5 billion gain from transmission tariff revisions. The company's credit rating was upgraded to AAA, the best in its history, reflecting strong cash generation and a robust EBITDA-to-net debt ratio. Cemig's investments in 2024 have already surpassed BRL 4 billion, with plans to exceed last year's BRL 4.8 billion, demonstrating a commitment to future growth and profitability. Additionally, Cemig is on track to invest 90% of its bold annual investment target of BRL 6.2 billion. Despite challenges in energy trading and market dynamics, the company's strategic divestment and investment plans continue to pave the way for sustainable growth and shareholder value creation.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.