Is Companhia Energetica de Minas Gerais (CIG) A Risky Investment?

Companhia Energetica de Minas Gerais (NYSE:CIG) finished Wednesday with an addition of $0.03 to close at $2.69, an upside of 1.13 percent. An average of 8,695,580 shares of common stock have been traded in the last five days. There was a gain of $0.22 in the past week. The last 20 days have seen an average of 6,674,185 shares traded, while the 50-day average volume stands at 5,709,808.

CIG stock has increased by 4.67% in the last month. The company shares reached their 1-month lowest point of $2.38 on 10/07/21. With the stock rallying to its 52-week high on 01/08/21, shares of the company touched a low of $1.56 and a high of $2.74 in 52 weeks. In spite of this, the price is down -1.82% from the 52-week high.


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Valuation Metrics

Companhia Energetica de Minas Gerais (CIG) has a trailing price-to-earnings (P/E) ratio of 5.93, which compares with the 17.20 for the broader industry and 23.32 for the sector. In the last five years, Companhia Energetica de Minas Gerais’s PE ratio has ranged between 143.11 and 1.984. The stock’s beta is 0.54. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.97, the price-to-book (PB) ratio at 1.27, and the price-to-cash flow ratio at 4.58.

Companhia Energetica de Minas Gerais pays a $0.16 dividend per share annually. It offers a dividend yield of 5.95%. The company has a payout ratio of 78.70%. The company’s most recent quarterly dividend payment took place on May. 3, and it was $0.13 a share, representing a up of 89.08 from $0.0142 last year. Its latest increase dividend $0.1158 reported on Friday April 6 2018.

Companhia Energetica de Minas Gerais will next go ex-dividend on 4-Jan. The next dividend payment Companhia Energetica de Minas Gerais will make is expected to be $0.076.

Further, the company has a long term debt to equity ratio of 0.61 and a total debt to equity ratio of 0.68 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 20.50% against a 5-year average of 21.6%. Companhia Energetica de Minas Gerais’s EBITDA margin for the year ending June 29 is 21.94%, while its operating margin for the same period stands at 22.80%. Its gross profit as reported stood at $736.42 million compared to revenue of $4.89 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Companhia Energetica de Minas Gerais’s return on assets was 7.90%, compared to 3.6% over the last five years. In the past year, the return on investment has been 11.50%, and the 5-year average is 8.8%. Meanwhile, the return on equity (ROE) for the past 12 months has been 23.40% and the 5-year average holds at 11.9%. For the broader industry, ROE averaged 9.87 over the past year.

Earnings Surprise

The analyst consensus anticipated Companhia Energetica de Minas Gerais’s latest quarter earnings to come in at $0.01 per share, but it turned out to be $0.22, a 2,100.00% surprise. For the quarter, EBITDA amounted to $295.05 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Companhia Energetica de Minas Gerais (CIG) price momentum. RSI 9-day as of the close on 13 October was 66.81%, suggesting the stock is Neutral, with historical volatility in this time frame at 34.20%.

As of today, CIG’s price is $2.59 +8.91% or $0.22 from its 5-day moving average. CIG is currently trading +4.26% higher than its 20-day SMA and +11.62% higher than its 100-day SMA. However, the stock’s current price level is +19.03% above the SMA50 and -4.27% below the SMA200.

The stochastic %K and %D were 86.07% and 67.35%, respectively, and the average true range (ATR) was 0.09. With the 14-day stochastic at 93.85% and the average true range at 0.09, the RSI (14) stands at 62.83%. The stock has reached 0.10 on the 9-day MACD Oscillator while the 14-day reading was at 0.09.

Analyst Ratings

Goldman launched coverage on Companhia Energetica de Minas Gerais (NYSE: CIG) in its analyst report released on November 14, 2019. The firm assigned the stock a a Buy rating.The consensus rating for Companhia Energetica de Minas Gerais (CIG) among analysts is Buy. According to current brokerage recommendations, 0 brokerage firms advise that investors sell CIG, while 1 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 6 others rate it as a “buy”.

What is CIG’s price target for the next 12 months?

Analysts predict a range of price targets between $2.78 and $2.78, with a median target of $2.78. Taking a look at these predictions, the average price target given by analysts for Companhia Energetica de Minas Gerais (CIG) stock is $2.78.

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