Companhia Energetica Minas Gerais (CIG) AI Stock Analysis

• Market Cap: $6.18B
• Dividend Yield: 75.73%
• Average Volume (3M): 2.96M
• Price to Earnings (P/E): 4.2
• Beta (1Y): 0.39
• Revenue Growth: -4.14%
• EPS Growth: 13.02%
• Country: US
• Employees: 5,028
• Sector: Utilities
• Sector Strength: 80
• Industry: Diversified Utilities
• EPS (TTM): 0.06
• Shares Outstanding: 1,905,179,900
• 10 Day Avg. Volume: 2,641,585
• 30 Day Avg. Volume: 2,960,603
• PEG Ratio: 0.05
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 146.98
• 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: $2.60
• Price Target Upside: 37.57% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 82 Outperform
• Price Target: ―

Companhia Energetica Minas Gerais scores 82, driven by strong financial performance, attractive valuation, and positive technical indicators. The company's robust profitability and strategic investment plans are tempered by challenges in their trading company and submarket pricing issues. Overall, the stock's high dividend yield and low P/E ratio offer attractive value, making it appealing for investors seeking both income and potential growth.

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 a solid financial position with strong profitability, efficient asset management, and consistent cash flow generation. The company's increased revenue and net income reflect positive growth, while its balance sheet indicates sound leverage and equity utilization. Cash flow management remains stable, though careful attention to future free cash flow trends is recommended.

Income Statement

Companhia Energetica Minas Gerais demonstrates strong profitability with a TTM Net Profit Margin of 17.38% and an increasing Revenue Growth Rate of 11.11% from 2023 to 2024. The company maintains a healthy EBIT Margin of 7.06% and EBITDA Margin of 19.01%, indicating sound operational efficiency. However, a dip in gross profit margin from 2022 to 2023 shows a potential area for caution.

Balance Sheet

The company maintains a solid financial structure with an improving Debt-to-Equity Ratio of 0.46 and a strong Equity Ratio of 45.83%. Return on Equity (ROE) for the TTM is impressive at 26.00%, reflecting efficient use of shareholders’ equity. Despite a slight increase in total debt, the balance sheet remains robust with a good asset management approach.

Cash Flow

Companhia Energetica Minas Gerais shows a solid Operating Cash Flow to Net Income Ratio of 0.77, suggesting effective cash generation. Although Free Cash Flow has decreased from the previous year, the Free Cash Flow to Net Income Ratio stands at 0.49. The company has managed its capital expenditures well, though a decline in operating cash flow compared to net income is an area to monitor.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
39.89B	39.82B	36.85B	34.46B	33.65B	25.23B
	Gross Profit
2.87B	3.15B	3.81B	6.81B	6.72B	5.38B
	EBIT
2.62B	5.32B	6.43B	5.69B	5.96B	4.94B
	EBITDA
7.33B	11.74B	8.88B	5.48B	6.82B	5.70B
	Net Income Common Stockholders
7.00B	7.12B	5.76B	4.09B	3.75B	2.86B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.03B	3.45B	3.13B	4.24B	4.05B	5.30B
	Total Assets
63.90B	59.73B	55.00B	53.67B	52.05B	54.08B
	Total Debt
15.66B	12.71B	10.26B	10.94B	11.61B	15.25B
	Net Debt
12.42B	10.81B	8.73B	9.49B	10.78B	13.57B
	Total Liabilities
35.98B	32.34B	30.34B	31.89B	32.58B	36.60B
	Stockholders Equity
27.91B	27.38B	22.79B	21.78B	19.46B	17.47B
Cash Flow		Free Cash Flow
1.67B	4.58B	5.38B	6.32B	3.45B	8.43B
	Operating Cash Flow
8.15B	5.50B	6.64B	6.61B	3.69B	8.61B
	Investing Cash Flow
-2.65B	-2.38B	-3.97B	-3.21B	1.37B	-5.08B
	Financing Cash Flow
-1.51B	-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 above the 20-day moving average (MA) of 1.85, above the 50-day MA of 1.76, and above the 200-day MA of 1.78, indicating a bullish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 60.40 is Neutral, neither overbought nor oversold. The STOCH value of 52.05 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	82 Outperform	$6.18B	4.17	26.38%	75.73%	-4.14%	13.02%
ELP	78 Outperform	$6.48B	12.61	9.22%	3.50%	-7.02%	17.33%
ELPC	77 Outperform	$6.48B	11.65	9.22%	3.44%	-7.02%	17.33%
SRE	72 Outperform	$49.55B	16.72	9.76%	3.40%	-0.39%	0.75%
Sector *	64 Neutral	$8.55B	10.42	4.24%	4.64%	4.05%	-13.04%
BIP	64 Neutral	$21.72B	2,867.59	0.47%	5.16%	12.40%	-108.27%
AES	54 Neutral	$8.17B	6.27	29.79%	6.13%	-3.22%	141.11%