If you are looking for stability and growth in Brazilian investments, check out these Brazilian utility stocks:
CPFL Energia S.A. (CPL) is one of the largest companies that provides electric generation and distribution in Brazil. The company is composed of CPFL Brasil, CPFL Pirantininga, CPFL Paulista, CPFL Geracao and SEMESA. It is headquartered in Campinas, Sao Paulo, and is the 44th largest Brazilian company in terms of sales.
The distribution side of the business results in 26,679 gigawatts of electricity going out to 4.5 million customers in the state of Sao Paulo. The company’s subsidiary, Rio Grande Energia, delivers 6,787 gigawatts of electricity to 1.1 million customers in the Rio Grande do Sul state. In total, the consumer group revenues were 31.4 percent from industrial customers, 19.6 percent from commercial customers, 37.3 percent from residential customers, and 3.3 percent from rural customers, along with 8.4 percent from other customers.
The company also owns 23 small hydroelectric generation facilities, and one thermoelectric power plant.
The stock has a P/E of 9, and a a yield of 9.5%.
Companhia de Saneamento Basico do Estado de Sao Paulo [SABESP] (SBS) is a utility company that operates out of Brazil, providing water and sewage services to residential, commercial and industrial customers in 367 municipalities in Sao Paulo, including the City of Sao Paulo. The services it provides are basic sanitation services, including abstraction, treatment, processing, distributing, and the collection and treatment of sewage.
The largest sector of revenue for the company is the Sao Paulo Metropolitan Regional and Regional Systems, which accounts for 74.5 percent and 25.5 percent of the sales and services for the company. The company has 17,000 employees.
In terms of water treatment, the company has 197 treatment facilities, of which the eight largest in the Sao Paulo Metro Region accounts for 72 percent of all the water produced. All of the water that is treated by the company receives fluoridation treatment.
The Sewage Treatment and Disposal aspect of the business collects between 58 and 73 percent of the sewage in the Sao Paulo Metro Region and Regional Systems, or 63 percent of all the sewage collected in the State of Sao Paulo. After the water has been treated, it is discharged into inland waters and the Atlantic Ocean. Currently, Sabesp has 438 sewage treatment facilities and eight ocean outfalls.
The stock has a forward P/E of 9.
Companhia Energetica de Minas Gerais [CEMIG] (CIG) is the largest combined power generator and distributor in Brazil, Companhia Energetica de Minas Gerais. It has over 50 power plants in operation, with a generating capacity of 6,000 megawatts. The company also owns cable television, internet and telecommunications services.
Over half of the stock in Cemig is owned by Minas Gerais, and it is traded both the Bovespa, as well as the New York Stock Exchange.
The power generation of the company is produced through 51 hydroelectric plants, four thermoelectric plants, and one wind farm. Eight of the hydroelectric plants account for 82.6 percent of the installed electric capacity of the company. The transmission side of the company is produced through 1,352 miles of 500 kilovolt power lines, 1,202 miles of 345 kilovolt power lines, and 467 miles of 230 kilovolt lines. The company also has 33 substations, with 97 transformers that have a transformation capacity of 15,393 megavolts.
The company transmits both its own energy, and the energy that is purchased from Itaipu. It has 12 industrial consumers, who account for almost 20 percent of the total volume of electricity the company sold.
The stock has a forward P/E of 8.
Companhia Paranaense de Energia [COPEL] (ELP), also known as COPEL, is an electric power company that specializes in the business of transmission, distribution and generation of electric power in Brazil’s Parana state. The company also provides telecommunication and information technology services through services it has developed with various partnerships. It has 17 hydroelectric plants, and one thermoelectric plant that generates 4.549.6 megawatts, 99.6 percent of which is hydroelectric. As of 2006, the company had 7,210 kilometer of transmission lines and 165,757 kilometers of distribution lines in Brazil.
The company is made up of five subsidiaries, Copel Geracao, Copel Transmissao, Copel Distribuicao, Copel Telecomunicacacaes and Copel Participacaes. The generation sector of the company is conducted through 18 power plants, which have a total capacity of 4,549 megawatts. In 2006, the company generated over 10,000 gigawatts per hour. All of the electrical energy generation is supervised at the generation operation center in the city of Curitiba. The system relies on 12 substations, 11 of which are remotely operated.
The stock has a P/E of 6, and a yield of 2.1%.
Disclosure: The author does not own any of the above.