Companhia Energética de Minas Gerais SA (NYSE:CIG.C) – A Quality Stock Worth Considering

Companhia Energética de Minas Gerais SA (NYSE:CIG.C) was identified by our Caviar Cruise screen, which focuses on high-quality companies with strong fundamentals. The Brazilian utility firm demonstrates solid profitability, efficient capital allocation, and manageable debt levels, making it a candidate for long-term investors.

Key Strengths

• High Return on Invested Capital (ROIC) – With an ROIC of 16.33%, CIG.C efficiently generates profits from its capital investments, outperforming many industry peers.
• Strong EBIT Growth – The company has delivered a 17.37% annual EBIT growth over the past five years, indicating improving operational efficiency.
• Healthy Debt Management – A Debt-to-Free Cash Flow ratio of 3.59 suggests the company can repay its debt in under four years using current cash flows.
• Profit Quality – A five-year average Profit Quality of 139.7% means the company converts net income into free cash flow effectively.

Valuation and Dividend

The stock trades at a P/E ratio of 6.08, well below the industry and S&P 500 averages, suggesting an attractive valuation. While the dividend yield of 2.16% is modest, the payout has grown significantly in recent years.

Fundamental Analysis Summary

Our report assigns CIG.C a score of 6 out of 10, noting strong profitability and financial health but mixed growth prospects. Earnings are expected to decline in the near term, though revenue growth remains stable.

For more quality stock ideas, explore our Caviar Cruise screener.

Disclaimer

This is not investing advice. Always conduct your own research before making investment decisions.