Companhia Energetica Minas Gerais (CIG) AI Stock Analysis

• Market Cap: $6.08B
• Dividend Yield: 18.95%
• Average Volume (3M): 2.91M
• Price to Earnings (P/E): 4.2
• Beta (1Y): 0.41
• Revenue Growth: -4.14%
• EPS Growth: 13.02%
• Country: US
• Employees: 5,028
• Sector: Utilities
• Sector Strength: 75
• Industry: Diversified Utilities
• EPS (TTM): 0.06
• Shares Outstanding: 1,905,179,900
• 10 Day Avg. Volume: 2,643,133
• 30 Day Avg. Volume: 2,913,354
• PEG Ratio: -3.81
• Price to Book (P/B): 1.54
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $2.00
• Price Target Upside: 5.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 80 Outperform
• Price Target: $2.00 ▲(5.82%Upside)

The overall stock score is driven by strong valuation metrics, reflecting the stock's attractiveness due to a low P/E ratio and high dividend yield. Technical analysis also supports a bullish outlook with positive momentum indicators. Financial performance remains solid, but concerns about cash flow and operational efficiency slightly temper the score.

Positive Factors

Dividends

The one-offs in the net income could result in a 4% additional dividend yield.

Privatization

The privatization process is the main upside risk, potentially boosting stock value.

Negative Factors

Operational Performance

Cemig reported soft operational results with Adj. EBITDA down 10% YoY.

Privatization Complexity

There is a low likelihood of Minas Gerais state-owned enterprises' privatization concluding due to complexity.

Companhia Energetica Minas Gerais Business Overview & Revenue Model

Company Description

Companhia Energética de Minas Gerais, through its subsidiaries, engages in the generation, transmission, distribution, and sale of energy in Brazil. As of December 31, 2021, the company operated 70 hydroelectric, wind, and solar plants with an installed capacity of 5,700 MW; 339,086 miles of distribution lines; and 4,449 miles of transmission lines. It is also involved in the acquisition, transportation, and distribution of gas and its sub products and derivatives; provision of cloud solution, IT infrastructure, IT management, and cybersecurity services; provision of technology systems and systems for operational management of public service concessions; sale and trading of energy; provision of telecommunications services; and distributed generation, account services, cogeneration, energy efficiency, and supply and storage management activities. The company was incorporated in 1952 and is headquartered in Belo Horizonte, Brazil.

How the Company Makes Money

CEMIG generates revenue through several key streams within the energy sector. The primary source of income comes from the generation and distribution of electricity to residential, commercial, and industrial clients. It owns and operates a diverse portfolio of power plants, including hydroelectric, wind, and solar facilities, which contribute to its energy generation capabilities. Additionally, CEMIG earns money through its transmission services, where it maintains and operates extensive power lines to deliver electricity over long distances. The company also engages in energy trading and sells excess power in the national electricity market. Significant partnerships with other energy firms and investments in new technologies and infrastructure projects further bolster its revenue. Regulatory frameworks and government policies in Brazil also impact its financial performance, influencing tariffs and operational efficiencies.

Companhia Energetica Minas Gerais Financial Statement Overview

Summary

Companhia Energetica Minas Gerais demonstrates solid revenue growth and profitability, with a strong net profit margin and a balanced debt-to-equity position. However, there are concerns regarding declining EBITDA margins and reduced free cash flow, which could impact future financial flexibility. The company shows overall financial stability with room for improvement in operational efficiency and cash flow management.

Income Statement

The company has shown a consistent growth in revenue over the years, with a TTM (Trailing-Twelve-Months) revenue of 39.89 billion compared to 39.82 billion in the previous annual period. Gross Profit Margin has decreased to 7.20% in the TTM from 7.90% in the last annual report, while the Net Profit Margin slightly improved to 17.56% in the TTM, indicating effective cost management. However, the EBIT and EBITDA margins have declined, suggesting potential challenges in operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is healthy at 0.56, reflecting a balanced approach to leveraging debt. The Return on Equity (ROE) for the TTM stands at 25.09%, showcasing strong profitability relative to equity. The equity ratio is at 43.67%, indicating a solid equity base. Despite these strengths, a slight increase in total liabilities suggests increased leverage, which could pose future risks.

Cash Flow

Free Cash Flow has decreased significantly in the TTM to 1.67 billion from 4.58 billion in the previous annual period, indicating reduced cash generation capacity. The Operating Cash Flow to Net Income ratio is robust at 1.16, demonstrating good cash conversion efficiency. However, the Free Cash Flow to Net Income ratio dropped to 0.24, raising concerns about the sustainability of cash flow generation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	39.82B	36.85B	34.46B	33.65B	25.23B
Gross Profit	7.83B	8.38B	6.81B	6.72B	5.38B
EBITDA	11.74B	9.15B	6.24B	6.92B	6.20B
Net Income	7.12B	5.76B	4.09B	3.75B	2.86B
Balance Sheet
Total Assets	59.73B	55.00B	53.67B	52.05B	54.08B
Cash, Cash Equivalents and Short-Term Investments	3.45B	3.13B	4.24B	4.05B	5.30B
Total Debt	12.71B	10.26B	10.94B	11.61B	15.25B
Total Liabilities	32.34B	30.34B	31.89B	32.58B	36.60B
Stockholders Equity	27.38B	24.65B	21.78B	19.46B	17.47B
Cash Flow
Free Cash Flow	4.58B	5.38B	6.32B	3.45B	8.43B
Operating Cash Flow	5.50B	6.64B	6.61B	3.69B	8.61B
Investing Cash Flow	-2.38B	-3.97B	-3.21B	1.37B	-5.08B
Financing Cash Flow	-2.76B	-2.58B	-2.79B	-5.91B	-2.39B

Companhia Energetica Minas Gerais Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 1.89 is below the 20-day moving average (MA) of 1.91, above the 50-day MA of 1.86, and above the 200-day MA of 1.75, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 51.39 is Neutral, neither overbought nor oversold. The STOCH value of 34.42 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIG	80 Outperform	$6.08B	4.17	26.38%	18.95%	-4.14%	13.02%
ELP	74 Outperform	$6.09B	12.03	9.22%	7.07%	-7.02%	17.33%
SRE	74 Outperform	$52.04B	17.56	9.76%	3.19%	-0.39%	0.75%
ELPC	70 Outperform	$6.09B	11.06	9.22%	0.98%	-7.02%	17.33%
BIP	64 Neutral	$21.01B	2,867.59	0.47%	6.39%	12.40%	-108.27%
Sector *	63 Neutral	HK$30.50B	8.75	5.37%	4.09%	-3.09%	4.51%
AES	61 Neutral	$9.83B	7.54	29.79%	5.00%	-3.22%	141.11%