Brazilian electricity company Companhia Energetica de Minas Gerais CIG, also known as CEMIG, recently announced that it will reward its stockholders with interest on equity payments.
As revealed, the payment of interest on equity is the first installment relating to CEMIG’s results of 2015. The company’s total disbursement will amount to R$100 million or approximately R$0.079 per share. It will be paid on Jun 30, 2016 to all stockholders on record as of Dec 30, 2015.
The news seems to be prime reason behind the 7.2% increase in CEMIG’s American Depository Receipt price since Jun 16. Below we provide the company's price chart:
CEMIG SA -ADR Price
CEMIG SA -ADR Price | CEMIG SA -ADR Quote
CEMIG has been consistently rewarding its stockholders handsomely through interest on equity and dividend payments. In first-quarter 2016, the company’s disbursement towards this end totaled R$22 million. Also, besides increasing the stockholders’ wealth, we believe these payments are reflective of the company’s strong cash flow position.
CEMIG is one of the largest integrated electric utilities in Brazil, with approximately 97% of its installed generation capacity being hydroelectric power. In addition to its integrated electricity business, the company is engaged in natural gas distribution and telecommunications. Despite these long-term growth prospects, we believe certain near-term concerns, including rising operating expenses, governmental interference and dependence on hydro sources for electricity, might impede the company’s growth momentum.
With a $2.1 billion market capitalization, CEMIG currently carries a Zacks Rank #4 (Sell). Better-ranked companies in the electric utility industry include Avangrid, Inc. AGR, RWE AG RWEOY and Spark Energy, Inc. SPKE. All these stocks sport a Zacks Rank #1 (Strong Buy).
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