Cia Energetica DE Minas Gerais - Cemig's Dividend Analysis
Assessing the Sustainability of Cemig's Upcoming Dividend
Cia Energetica DE Minas Gerais - Cemig (NYSE:CIG) recently announced a dividend of $0.12 per share, payable on a date yet to be announced, with the ex-dividend date set for 2023-12-22. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Cia Energetica DE Minas Gerais - Cemig's dividend performance and assess its sustainability.
What Does Cia Energetica DE Minas Gerais - Cemig Do?
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Cia Energetica DE Minas Gerais - Cemig, formerly known as the Energy Company of Minas Gerais, is a Brazilian power company that generates, transmits, and distributes electricity. As one of the largest power companies in Brazil, the firm operates across most Brazilian states and Chile. The company has various subsidiaries and operates chiefly through its generation, transmission, distribution, and gas segments. The majority of the company's revenue is derived from electricity sales to consumers. The company generates power primarily through hydroelectric resources, with thermal and wind resources also contributing to its energy mix.
A Glimpse at Cia Energetica DE Minas Gerais - Cemig's Dividend History
Cia Energetica DE Minas Gerais - Cemig has maintained a consistent dividend payment record since 2002, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Cia Energetica DE Minas Gerais - Cemig's Dividend Yield and Growth
As of today, Cia Energetica DE Minas Gerais - Cemig currently has a 12-month trailing dividend yield of 5.99% and a 12-month forward dividend yield of 9.65%, suggesting an expectation of increased dividend payments over the next 12 months.
Over the past three years, Cia Energetica DE Minas Gerais - Cemig's annual dividend growth rate was 74.60%. Extended to a five-year horizon, this rate increased to 94.30% per year. And over the past decade, Cia Energetica DE Minas Gerais - Cemig's annual dividends per share growth rate stands at 6.40%. Based on Cia Energetica DE Minas Gerais - Cemig's dividend yield and five-year growth rate, the 5-year yield on cost of Cia Energetica DE Minas Gerais - Cemig stock as of today is approximately 165.88%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Cia Energetica DE Minas Gerais - Cemig's dividend payout ratio is 0.49. Cia Energetica DE Minas Gerais - Cemig's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Cia Energetica DE Minas Gerais - Cemig's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Cia Energetica DE Minas Gerais - Cemig's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Cia Energetica DE Minas Gerais - Cemig's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Cia Energetica DE Minas Gerais - Cemig's revenue has increased by approximately 10.60% per year on average, a rate that outperforms approximately 61.28% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Cia Energetica DE Minas Gerais - Cemig's earnings increased by approximately 17.40% per year on average, a rate that outperforms approximately 73.85% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 49.50%, which outperforms approximately 96.87% of global competitors.
Engaging Conclusion
In conclusion, Cia Energetica DE Minas Gerais - Cemig's upcoming dividend, impressive growth rates, and strong payout ratio signal a promising outlook for dividend sustainability. The company's robust profitability and growth metrics further support the potential for continued dividend payments. Investors seeking high-dividend yield stocks may find Cia Energetica DE Minas Gerais - Cemig an intriguing option. Could this be the right time to invest in Cia Energetica DE Minas Gerais - Cemig for dividend-seeking investors? GuruFocus Premium users can explore this and other high-dividend yield opportunities using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
