Companhia Energetica Minas Gerais (CIG) AI Stock Analysis

• Market Cap: $7.01B
• Dividend Yield: 12.98%
• Average Volume (3M): 3.47M
• Price to Earnings (P/E): 8.8
• Beta (1Y): 0.39
• Revenue Growth: -0.38%
• EPS Growth: -53.94%
• Country: US
• Employees: 5,028
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.06
• Shares Outstanding: 1,905,179,900
• 10 Day Avg. Volume: 5,259,844
• 30 Day Avg. Volume: 3,466,388
• PEG Ratio: 0.18
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 0.79
• P/FCF Ratio: 6.86
• Enterprise Value/Market Cap: 8.29
• Enterprise Value/Revenue: 1.34
• Enterprise Value/Gross Profit: 9.62
• Enterprise Value/Ebitda: 9.32
• 1Y Price Target: $1.90
• Price Target Upside: -6.86% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.23
• Revenue Forecast (FY): $6.92B

• Rating: 70 Outperform
• Price Target: $2.50 ▲(22.55% Upside)

Companhia Energetica Minas Gerais scores well due to its strong financial performance and attractive valuation, with a high dividend yield and low P/E ratio. While technical indicators show a positive trend, momentum is limited. The earnings call reflects resilience despite financial challenges, contributing to a balanced outlook.

Positive Factors

High Return on Equity

ROE above 23% indicates the company efficiently converts equity into profits, reflecting durable operational profitability. High ROE supports sustained shareholder returns and provides internal funding capacity for investments, enabling long-term growth and resilience through cycles.

AAA Credit Ratings

Maintaining AAA ratings materially lowers borrowing costs and preserves access to capital for multi-year capex. Strong credit quality enhances financial flexibility for grid upgrades and debt amortization, reducing refinancing risk and supporting long-term investment plans.

Large, Targeted Investment Program

A BRL4.7bn investment program, heavily focused on distribution, modernizes infrastructure, reduces technical losses, and increases the regulated asset base. These durable improvements raise service reliability and underpin steadier regulated cash flows over the medium term.

Negative Factors

Recurring EBITDA Decline

A 16.3% drop in recurring EBITDA signals sustained margin pressure from lower trading margins and higher operating costs. Persistent EBITDA erosion weakens cash generation, coverage ratios and could force tougher capital allocation choices, impacting long-term profitability.

Weaker Operating Cash Flow

Declining operating cash flow and reduced free-cash-flow conversion impair the company's ability to self-fund capex and dividends. Over time this raises reliance on external finance, which, despite good credit, increases financial risk if cash conversion does not recover.

Client Migration and Market Reduction

Structural client migration and a ~4.4% market contraction reduce regulated volumes and revenue predictability. Loss of large customers or transfers to basic networks pressures distribution unit economics and may necessitate tariff adjustments or efficiency gains to protect margins long-term.

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

CIG generates revenue through multiple streams, primarily from the sale of electricity to residential, commercial, and industrial customers. The company operates a diversified portfolio of power generation facilities, with a significant portion of its output coming from hydroelectric power plants, which are often complemented by thermal plants and renewable energy projects. Revenue is also derived from transmitting electricity through its network of transmission lines and substations. Key partnerships with regulatory bodies and other energy firms facilitate access to new markets and investment opportunities, enhancing its earning potential. Additionally, CIG may engage in long-term power purchase agreements (PPAs) with large consumers, ensuring stable cash flows and reducing market volatility impacts.

Companhia Energetica Minas Gerais Financial Statement Overview

Summary

Companhia Energetica Minas Gerais demonstrates solid financial performance with strong profitability and efficient equity use. While revenue growth is positive, some pressure on margins and cash flow conversion could pose challenges. The company's moderate leverage and strong return on equity are positive indicators, but careful monitoring of cash flow metrics is advisable.

Income Statement

Companhia Energetica Minas Gerais shows strong profitability with a consistent EBIT margin of over 20% in TTM (Trailing-Twelve-Months). However, the gross profit margin has slightly declined from previous years. Revenue growth is positive, but the net profit margin has decreased compared to the previous year, suggesting some pressure on net earnings.

Balance Sheet

The company's debt-to-equity ratio is moderate at 0.55 in TTM, indicating a balanced approach to leveraging. Return on equity remains strong at over 23%, showcasing efficient use of equity. However, the equity ratio is not explicitly provided, which limits a full assessment of asset financing.

Cash Flow

Operating cash flow has decreased compared to the previous year, impacting the operating cash flow to net income ratio. Free cash flow growth is positive in TTM, but the free cash flow to net income ratio has declined, indicating potential challenges in converting income into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	43.41B	39.82B	36.85B	34.46B	33.65B	25.23B
Gross Profit	6.04B	7.83B	8.38B	6.81B	6.72B	5.38B
EBITDA	6.23B	11.74B	9.15B	6.24B	6.92B	6.20B
Net Income	4.02B	7.12B	5.76B	4.09B	3.75B	2.86B
Balance Sheet
Total Assets	64.75B	59.73B	55.00B	53.67B	52.05B	54.08B
Cash, Cash Equivalents and Short-Term Investments	2.32B	3.45B	3.13B	4.24B	4.05B	5.30B
Total Debt	15.84B	12.71B	10.26B	10.94B	11.61B	15.25B
Total Liabilities	36.02B	32.34B	30.34B	31.89B	32.58B	36.60B
Stockholders Equity	28.73B	27.38B	24.65B	21.78B	19.46B	17.47B
Cash Flow
Free Cash Flow	1.98B	4.58B	5.38B	6.32B	3.45B	8.43B
Operating Cash Flow	4.28B	5.50B	6.64B	6.61B	3.69B	8.61B
Investing Cash Flow	-3.93B	-2.38B	-3.97B	-3.21B	1.37B	-5.08B
Financing Cash Flow	-2.56B	-2.76B	-2.58B	-2.79B	-5.91B	-2.39B

Companhia Energetica Minas Gerais Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 2.04 is below the 20-day moving average (MA) of 2.08, above the 50-day MA of 2.02, and above the 200-day MA of 1.89, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 63.46 is Neutral, neither overbought nor oversold. The STOCH value of 71.64 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	70 Outperform	$7.01B	8.82	13.35%	12.98%	-0.38%	-53.94%
ELPC	67 Neutral	$7.48B	19.32	8.00%	5.43%	1.96%	-35.00%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
SRE	65 Neutral	$56.27B	26.55	7.10%	2.91%	9.07%	-28.58%
AES	65 Neutral	$10.49B	8.97	23.02%	5.06%	-1.55%	12.83%
BIP	59 Neutral	$16.92B	37.52	7.99%	4.92%	8.14%	―

Companhia Energetica Minas Gerais Corporate Events

Cemig Books R$1.25 Billion Health-Plan Settlement and Awaits Tax Refund Impact After Supreme Court Ruling

In August and September 2025, Cemig advanced the resolution of legacy labor and regulatory issues while signaling potential financial impacts for its electricity distribution operations. On September 11 and 19, 2025, the company negotiated and secured court approval for a collective bargaining agreement with two key labor unions covering its Cemig Saúde PSI health plan, committing to pay up to R$1.25 billion in compensatory buyouts, in six installments through 2030, to 15,496 retirees and pensioners, and indicated it aims to reach similar deals with remaining unions. Separately, on August 14, 2025, Cemig reported that Brazil’s Federal Supreme Court had upheld the constitutionality of Law 14,385/2022 on refunds of overpaid taxes to electricity consumers, and the company is awaiting the court’s formal ruling to evaluate the accounting, financial and operational consequences for its business, an outcome that could affect both its balance sheet and the pass-through of refunds in its regulated distribution segment.

The most recent analyst rating on (CIG) stock is a Buy with a $2.50 price target. To see the full list of analyst forecasts on Companhia Energetica Minas Gerais stock, see the CIG Stock Forecast page.