The Utilities group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has Cemig (CIG) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.Cemig is one of 109 companies in the Utilities group. The Utilities group currently sits at #2 within the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zack ...

BELO HORIZONTE, Brazil, May 1, 2025 /PRNewswire/ -- A COMPANHIA ENERGÉTICA DE MINAS GERAIS – CEMIG ("CEMIG") (NYSE: CIG), (NYSE: CIG.C), (B3: CMIG3), (B3: CMIG4) - a publicly held company with shares traded on the stock exchanges of São Paulo, New York and Madrid, hereby informs the Brazilian Securities and Exchange Commission (CVM), B3 S.A. – Brasil, Bolsa, Balcão ("B3") and the market in general that it has filed on April 30, 2025, Form 20-F for the 2024 fiscal year ("2024 Form 20-F") with the U.S. Securi ...

Financial Exposure and Risk Management - As of December 31, 2024, CEMIG has no outstanding indebtedness denominated in foreign currencies, and its net liabilities exposed to foreign exchange fluctuations amount to R$210 million in a base scenario, with a probable relief of R$16 million and an adverse increase of R$10 million [1054]. - The sensitivity analysis indicates that in a probable scenario, the Selic rate will be 9.15% and the TJLP rate will be 7.94% on December 31, 2025, with net liabilities exposed to interest rate fluctuations estimated at R$1,245 million [1062]. - CEMIG's net exposure to inflation indices as of December 31, 2024, shows net liabilities of R$2,565 million, with assets indexed to inflation totaling R$5,905 million and liabilities amounting to R$8,470 million [1065]. - The company reported a positive result of R$521 million from hedging transactions related to US$381.1 million, resulting in a net cash inflow of R$443 million as of December 5, 2024 [1059]. - The company has implemented derivative financial instruments to protect against foreign exchange risks, ensuring that these instruments are not used for speculative purposes [1056]. - The company estimates that in an adverse scenario, the net effect of fluctuations in interest rates could lead to a loss of R$188 million [1064]. Liquidity Management - CEMIG's liquidity management includes monthly cash flow projections over 12 months and daily liquidity projections over 180 days, ensuring sufficient cash flow for operational needs [1070]. - CEMIG's cash equivalents and marketable securities amount to R$4,524 million, while total liabilities are R$4,898 million, resulting in net liabilities exposed of R$374 million [1061]. - The company has 2,462 million reais in principal payments due within 3 months to 1 year [1074]. Financial Obligations - Total financial obligations amount to 22,300 million reais, with principal payments of 19,374 million reais and interest payments of 1,528 million reais [1074]. - Loans and debentures account for 18,646 million reais, with principal payments of 16,000 million reais due over 1 to 5 years [1074]. - Supplier obligations total 2,926 million reais, primarily due within 1 month at 2,761 million reais [1074]. - Fixed rate obligations include 5,672 million reais due over 1 to 5 years, with 5,354 million reais in principal payments [1074]. - Interest payments on loans and debentures amount to 2,217 million reais over 1 to 5 years [1074]. - Total interest payments across all obligations amount to 2,298 million reais over 1 to 5 years [1074]. - The pension plan deficit (FORLUZ) totals 695 million reais, with 304 million reais due over 1 to 5 years [1074]. - The company has 5 million reais in obligations due within 1 month related to the pension plan [1074]. - Total obligations over 5 years amount to 6,124 million reais, with 5,902 million reais in principal payments [1074]. Credit Risk - Any reduction in CEMIG's credit ratings could increase financing costs and complicate debt refinancing, potentially impacting operational capabilities [1073]. Investment Strategy - CEMIG's financial strategy includes investing in private credit investment funds and bank CDs to optimize returns while managing liquidity risk [1071].

Financial Data and Key Metrics Changes - The company achieved a record EBITDA of BRL 11.3 billion, marking a significant increase compared to the previous year [7][24] - Net profit reached nearly BRL 1 billion, influenced by higher investments and increased tax payments due to higher profits [32] - The company reported a total debt of BRL 9.9 billion, with a stable debt cost around 12% [33][35] Business Line Data and Key Metrics Changes - The distribution segment showed an improvement in EBITDA, while the trading segment experienced a decline due to lower margins [50] - The company reported a reduction of 2.5 hours in the DEC indicator, reflecting improved service delivery [27] - The generation segment also saw adjustments, with trading margins down compared to the previous year [50] Market Data and Key Metrics Changes - The company noted a favorable hydrology in November and December, which positively impacted energy demand [39] - The captive market experienced a slight reduction of 0.6%, while the free market continued to grow [40] - The company is a leader in Brazil's retail trading market, both in terms of transaction volume and energy transacted [41] Company Strategy and Development Direction - The company is focused on a bold investment program, planning to invest BRL 59.1 billion from 2019 to 2028, significantly above regulatory depreciation [14] - There is a strong emphasis on sustainability, with the company being recognized for its clean energy matrix and various sustainability achievements [21][22] - The company is also working on digital transformation and regionalization to improve service quality and operational efficiency [54][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's transformation and sustainability, highlighting the importance of infrastructure investment for regional development [9][18] - The company is open to negotiations regarding health care plans and is actively engaging with unions [68] - There are ongoing discussions regarding potential privatization, with management cooperating with the Economic Development Secretariat [73] Other Important Information - The company plans to distribute BRL 5 billion in dividends, reflecting strong financial performance [20] - The company has made significant progress in reducing operational expenses, ending the year with BRL 156 million lower than regulatory limits [46] - The company is committed to maintaining compliance with regulatory standards and improving operational efficiency [43] Q&A Session Summary Question: Can you comment on the negotiations regarding health care plans and updates on divestments? - Management confirmed ongoing negotiations with unions regarding health care plans and mentioned divestments related to Taesa and Belo Monte [62][71] Question: How is the union behaving in negotiations, and what about exposure in sub-markets? - Management stated they are open to negotiations and have been in contact with the union, while also addressing exposure to price differences in energy trading [77][79]

Financial Data and Key Metrics Changes - The company achieved its highest EBITDA in history at BRL 5 billion for Q3 2024, reflecting a significant turnaround and financial strength [8][19] - The company received a AAA rating, the best in its history, with over six notches of growth in a five-year period [6][20] - Cash generation remained robust, with BRL 1.8 billion in EBITDA for the quarter [31] Business Line Data and Key Metrics Changes - The sale of Alianca Energia resulted in a capital gain of BRL 1.6 billion [7][34] - The transmission tariff revision contributed an additional BRL 1.5 billion in IFRS adjustments [8][34] - Investments in distribution increased significantly, with BRL 4.4 billion realized investments, nearly four times the previous levels [28][29] Market Data and Key Metrics Changes - The average tariff adjustment for the quarter was 7.32%, with market growth of 4.5% in Minas Gerais [33][52] - The captive market showed a slight decline, while residential clients improved due to high temperatures [53] Company Strategy and Development Direction - The company is focused on a bold investment plan of BRL 6.2 billion for the year, with expectations to invest over 90% of the forecasted amount [28][29] - The controlling shareholder has submitted a bill to turn Cemig into a corporation, indicating a strategic shift [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future cash generation and the impact of upcoming tariff reviews in 2028 [79] - The company is committed to maintaining low leverage while executing a significant investment program [79] Other Important Information - The company was recognized as one of the most transparent companies in Brazil due to the quality of its financial statements [30] - The company is investing in technology and digital transformation to prepare for future challenges [67] Q&A Session Summary Question: Understanding the bill of law for Cemig to become a corporation - Management indicated that the best entity to answer this would be the Minas Gerais administration, and a referendum may be required if the bill is approved [71][73] Question: Insights on energy purchase and sale in the quarter - The company did not need to purchase energy due to not being in an open position, but faced price differences due to market dynamics [75][77] Question: Projections on leverage and dividends - The company expects leverage to increase due to dividends and investments, projecting a leverage ratio between 2 and 2.5 by 2027 [79]

Core Viewpoint - The article emphasizes the value investing strategy, highlighting Comp En De Mn Cemig (CIG) as a strong value stock based on its financial metrics and Zacks Rank [2][8]. Financial Metrics - CIG has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4]. - The stock's Forward P/E ratio is 6.67, significantly lower than the industry's average of 16.41, suggesting it is undervalued [4]. - CIG's P/B ratio stands at 1.11, compared to the industry's average of 2.72, further indicating attractive valuation [5]. - The P/S ratio for CIG is 0.75, while the industry average is 2.07, reinforcing the notion of undervaluation [6]. - CIG's P/CF ratio is 3.93, compared to the industry's average of 12.70, highlighting its strong cash flow outlook [7]. Investment Outlook - The combination of CIG's favorable financial ratios and strong earnings outlook positions it as an impressive value stock currently [8].

Group 1 - Cemig (CIG) is a notable stock in the Utilities sector, currently outperforming its peers with a year-to-date return of approximately 17.7% compared to the sector average of 16.8% [4] - Cemig holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, with the consensus estimate for full-year earnings having increased by 61.4% over the past three months [3] - The Utilities sector, which includes Cemig, ranks 5 in the Zacks Sector Rank, with a total of 105 individual stocks [2] Group 2 - Cemig is part of the Utility - Electric Power industry, which consists of 59 stocks and currently ranks 42 in the Zacks Industry Rank, indicating that it is slightly underperforming its industry average return of 20.7% this year [5] - Pinnacle West (PNW) is another stock in the Utilities sector that has outperformed the sector with a return of 23.1% year-to-date [4][5] - Both Cemig and Pinnacle West are expected to continue their solid performance, making them attractive options for investors interested in Utilities stocks [6]

Group 1 - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] - Fast-moving trending stocks can be risky if their valuations exceed future growth potential, leading to potential losses for investors [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score [3] Group 2 - Cemig (CIG) is highlighted as a strong candidate for momentum investing, with a recent price increase of 1.5% over the past four weeks [4] - CIG has gained 17.1% over the past 12 weeks, indicating strong momentum, with a beta of 1.29, suggesting it moves 29% more than the market [5] - CIG has a Momentum Score of B, indicating a favorable time to invest, and it has a Zacks Rank 2 (Buy) due to positive earnings estimate revisions [6][7] Group 3 - CIG is trading at a Price-to-Sales ratio of 0.78, suggesting it is undervalued, as investors pay only 78 cents for each dollar of sales [7] - The stock has significant potential for further price appreciation, supported by its fast-paced momentum characteristics [8] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, indicating more investment opportunities [8]

Group 1 - Cemig (CIG) has returned approximately 17.7% year-to-date, outperforming the average Utilities sector gain of 14.4% [4] - The Zacks Rank for Cemig is currently 2 (Buy), indicating a positive earnings outlook with a 61.4% increase in the full-year earnings estimate over the past quarter [3] - Cemig belongs to the Utility - Electric Power industry, which has an average year-to-date gain of 18.1%, indicating that Cemig is slightly underperforming its industry [5] Group 2 - National Fuel Gas (NFG) has a year-to-date return of 18.8% and also holds a Zacks Rank of 2 (Buy) [4][5] - The consensus EPS estimate for National Fuel Gas has increased by 2.8% over the past three months [5] - The Utility - Gas Distribution industry, to which National Fuel Gas belongs, has gained 11.6% year-to-date [6]

Core Viewpoint - Cemig, a state-owned electricity company in Brazil, demonstrates strong operational efficiency and financial stability, making it an attractive option for dividend-seeking investors despite governance risks associated with its state ownership [1][10][13]. Financial Performance - In Q2, Cemig's consolidated net revenue increased by 7% year-over-year, driven by tariff adjustments of 7.4% for distribution and 5.4% for transmission [3][4]. - The company's recurring EBITDA rose by 2% to R$1.9 billion, while recurring net income decreased by 6.6% after tax adjustments [4]. - Operating cash flow for the first half of the year reached R$3.45 billion, indicating strong cash generation capabilities [4]. Investment Plans - Cemig plans to invest R$6.2 billion by 2024, with R$2.4 billion already invested, focusing on modernization and maintenance of the electric system [5][6]. - The investment plan for 2024-2028 totals R$35.6 billion, primarily allocated to regulated investments, which are predictable and less likely to face regulatory rejection [6]. Dividend Distribution - The company maintains a healthy dividend distribution strategy, with a current dividend yield of 6.1% and a payout ratio below 60% [9][12]. - Cemig's net debt to recurring EBITDA ratio stands at 1.02x, allowing for sustainable dividend payments while managing debt effectively [7][8]. Valuation - Cemig's stock is currently trading at attractive multiples, with a price-to-earnings ratio of 5.5x and a forward EV/EBITDA of 5.2x, both better than the sector median [9][10]. - Despite governance risks, the company's valuation remains appealing, with a forward price-to-earnings ratio of 7.3x, slightly below its 10-year average of 7.8x [10][12]. Governance and Risks - Governance risks are highlighted due to significant state ownership, with 50.9% of shares held by the State of Minas Gerais, which may impact investor confidence [10][11]. - The company has shown resilience in operations, but external factors such as macroeconomic conditions and regulatory changes pose potential risks [14].