Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

This Brazilian Company Offers Good Dividend And Cap Gains Upside , But Mind The Risks

Operating a regulated business in Brazil is no picnic, as investors in companies as diverse as Cosan (NYSE:CZZ), Petrobras (NYSE:PBR), AES (NYSE:AES), and CEMIG (NYSE:CIG) can attest. It's no less of an issue for COPEL (Companhia Paranaense de Energia) (NYSE:ELP), as concession expirations in 2015 threaten both the generation and distribution businesses, and there are no guarantees that Brazilian authorities will continue to be reasonable with tariff adjustments for operators in the electrical utility sector.

It is not as though these risks are going uncompensated, though. COPEL is priced to yield about 5% today and does look meaningfully undervalued on the basis of 2014 EBITDA. What's more, Brazilian...

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