Utilities
28 Foreign Electric Utilities Listed on the OTC Markets
Some of the foreign electric utility companies trading on the OTC markets have high dividend yields. A few of the excellent electric utilities in this group include E.ON AG (OTC: EONGY) of Germany, Iberdrola (OTC: IBDRY) of Spain, Energias De Portugal (OTC: EDPFY) of Portugal and Scottish and Southern Energy Plc (OTC: SSEZY) of UK. The current dividend yields of these stocks are listed below:
E.ON AG: 4.96%
Iberdrola: 4.46%
Energias De Portugal: 4.31%
Scottish and Southern Energy Plc: 8.19%
The Complete List of Foreign Electric Utilities listed on the OTC exchanges are shown below:
| S.No. | Name | Ticker | Country |
|---|---|---|---|
| 1 | AES TIETE SA | AESAY | Brazil |
| 2 | CENTRAIS ELETRICAS DE SANTA CATARINA SA | CEDWY | Brazil |
| 3 | CENTRENERGO | CTEUY | Ukraine |
| 4 | CIA DE TRANSMISSAO DE ENERGIA ELETRICA PAULISTA | CTPTY | Brazil |
| 5 | CIA ENERGETICA DE SAO PAULO | CSQSY | Brazil |
| 6 | CIA PARANAENSE DE ENERGIA | ELPVY | Brazil |
| 7 | CLP HOLDINGS LTD | CLPHY | Hong Kong |
| 8 | DATANG INTERNATIONAL POWER GENERATION CO LTD | DIPGY | China |
| 9 | E.ON AG | EONGY | Germany |
| 10 | ENERGIAS DE PORTUGAL | EDPFY | Portugal |
| 11 | EVN AG | EVNVY | Austria |
| 12 | HONG KONG ELECTRIC HOLDINGS | HGKGY | Hong Kong |
| 13 | IBERDROLA SA | IBDRY | Spain |
| 14 | INTERCONEXION ELECTRICA SA | IESFY | Colombia |
| 15 | INTERNATIONAL POWER PLC | IPRPY | United Kingdom |
| 16 | IRKUTSKENERGO | IKSGY | Russia |
| 17 | KHMELNITSKOBLENERGO | KHMGY | Ukraine |
| 18 | KUZBASSENERGO | KZBGY | Russia |
| 19 | LIGHT SA | LGSXY | Brazil |
| 20 | MOSENERGO | AOMOY | Russia |
| 21 | MPX ENERGIA SA | MPXEY | Brazil |
| 22 | RWE AG | RWEOY | Germany |
| 23 | SAMARAENERGO | SMRGY | Russia |
| 24 | SAMARAENERGO | SMRJY | Russia |
| 25 | SCOTTISH & SOUTHERN ENERGY PLC | SSEZY | United Kingdom |
| 26 | TRACTEBEL ENERGIA SA | TBLEY | Brazil |
| 27 | UNIFIED ENERGY SYSTEM OF RUSSIA | USEPY | Russia |
| 28 | VERBUND - OESTERREICHISCHE ELEKTRIZITAETSWIRTSCHAFTS AG | OEZVY | Austria |
It must noted that many of these stocks are lightly traded on a daily basis and may not be suitable for all investors.
Ten Leading Global Utility Stocks
The Dow Jones Utilities Titans 30 Index represents 30 leading companies in the global utilities sector. These stocks are selected based on “rankings by float-adjusted market capitalization, revenue and net profit.”
Generally considered as defensive plays, utility stocks offer consistent yields and stable long-term growth. However this year the sector is under-performing other sectors.For example, the S&P 500 is up 10.13% for the year as of September 2nd. The IT components in the index are up a cool 35.88% year-to-date(YTD) But the utility components are the second worst performers with a loss of 1.94% YTD.Mirroring this index is the performance of The Dow Jones Utilities Titans 30 Index which contains utilities from many countries. This index is down 0.05% as of August 31,2009. Last year during the brutal market correction the index fell 32%. The current dividend yield of this is 3.81%.
The Top 10 Components from the DJ Utilities Titans 30 Index and their current yields are listed below:
Company: E.ON AG (EONGY)
Country: Germany
Dividend Yield: 4.93%%
Company: GDF Suez S.A. (GDFZY)
Country: France
Dividend Yield: 2.01%
Company: RWE AG (RWEOY)
Country: Germany
Dividend Yield: 6.59%
Company: Enel S.p.A.(E)
Country: Italy
Dividend Yield: 14.26%
Company: Tokyo Electric Power Co. Inc. (TKECF)
Country: Japan
Dividend Yield: No regular dividends paid
Company: Exelon Corp.(EXC)
Country: USA
Dividend Yield: 4.32%
Company: Iberdrola S.A.(IBDRY)
Country: Spain
Dividend Yield: 5.76%
Company: Southern Co.(SO)
Country: USA
Dividend Yield: 5.63%
Company: National Grid PLC (NGG)
Country: Uk
Dividend Yield: 7.30%
Company: FPL Group Inc.(FPL)
Country: USA
Dividend Yield: 3.41%
Global Utility ETFs and a Related Article:
SPDR S&P International Utilities Sector ETF (IPU)
S&P Global Utilities Sector Index Fund (JXI)
European Utilities Vs. US Utilities
German Utility E.ON has Stable Growth and Solid Dividend Yield
Germany-based E.ON is one of the largest natural gas and electricity producer in the world. The ADR stock trades on the OTC with ticker EONGY.Currently it pays a juicy 5.79% dividend and has a $65B market cap. From its March lows of $22 the ADR has nicely rebounded to close at $35.54 today.
The following are some interesting points pulled from E.ON’s corporate site:
- E.ON was formed in June 2000 by the merger of VEBA and VIAG, two of Germany’s largest industrial groups
- E.ON has about 74 GW of installed generating capacity, making us one of the world’s leading power producers.
- Operate and market an inter-regional gas pipeline system in Germany with a system length of 11,552 kilometers
- 93,500 employees generated just under EUR87 billion in sales in 2008
- Electricity and gas sales increased by 26% and 12% in 2008 over 2007
- The dividend payout amount has increased every year since 2004
- Since 2004, yearly dividend payments also increased consistently
- The 2009 Annual Shareholders Meeting, has approved on May 6, 2009 the cash dividend be increased by 9.5 percent, from EUR1.37 per share for the 2007 financial year to EUR1.50 per share for the 2008 financial year
- Since the 2003 financial year, the dividend amount has increased by an average of 17.5% per year
- US and Canadian investors hold 27.4% of all free float stock
Many Foreign Utilities Are Up Nicely Off March Lows
Foreign utility stocks have performed well similar to the financial sector off the lows attained in March this year.While the financial sector gets most of the media attention due to the stress-tests in the US, bailouts and other events, I wanted to find out how the foreign utility sector was performing since the March lows. The results of my research is displayed below in a simple table below.
Performance of Foreign Utilities since March lows:
| Company | Ticker | Country | Current Price | Growth Since March Low | Dividend Yield as of May8,2009 |
|---|---|---|---|---|---|
| Edenor SA | EDN | Argentina | $5.43 | 86.60% | N/A |
| MetroGAS S.A. | MGS | Argentina | $1.32 | 30.69% | N/A |
| Transportadora de Gas Del Sur S.A. | TGS | Argentina | $2.23 | 36.81% | 2.29% |
| Brookfield Infrastructure Partners L.P. | BIP | Bermuda | $13.53 | 89.23% | 7.83% |
| COMP ENERG CEMIG ADS | CIG | Brazil | $15.53 | 23.25% | 2.20% |
| CPFL Energia S.A. | CPL | Brazil | $48.80 | 39.71% | 7.11% |
| Centrais Electricas Brasileiras S.A. | EBR | Brazil | $13.25 | 36.46% | 2.00% |
| Companhia Paranaense de Energia | ELP | Brazil | $13.55 | 57.56% | 1.16% |
| Companhia de Saneamento Basico do Estado de Sao Paulo | SBS | Brazil | $29.02 | 61.49% | N/A |
| TransAlta Corp. | TAC | Canada | $18.60 | 34.20% | 5.42% |
| TransCanada Corp. | TRP | Canada | $26.38 | 18.62% | 5.01% |
| Consolidated Water Co. Ltd. | CWCO | Cayman Islands | $12.93 | 103.62% | 2.01% |
| Enersis S.A. | ENI | Chile | $15.90 | 17.78% | 4.91% |
| Empresa Nacional de Electricidad S.A. | EOC | Chile | $41.11 | 20.06% | 3.98% |
| A-Power Energy Generation Systems, Ltd. | APWR | China | $10.75 | 258.33% | N/A |
| Huaneng Power International Inc. | HNP | China | $27.54 | 21.59% | 6.17% |
| Veolia Environnement SA | VE | France | $29.07 | 49.38% | 6.50% |
| Korea Electric Power Corp. | KEP | South Korea | $11.90 | 73.72% | N/A |
| Cascal N V | HOO | United Kingdom | $3.50 | 69.08% | 5.14% |
| National Grid plc | NGG | United Kingdom | $43.85 | 19.68% | 4.32% |
As shown in the listing above, many of the stocks are up in double digit percentages.Seven of the stocks have dividend yield of over 5% even after the rise. It must be noted that though Brazilian utilities such as CPFL Energia S.A. (CPL) pay over 7% in dividends, they can be volatile and do not follow consistent payment patterns.However utilties in the developed world such as Veolia Environnement (VE) of France, TransAlta Corp.(TAC) of Canada, National Grid plc(NGG) etc. have relatively safer yields and have great business models.
Foreign Utilities List with Current Yields
During bear markets utility stocks used to be provide shelter for investors since they were considered to be stable, slow-growth and conservative investments. However that has changed in the past few years. These days they do not seem to offer the much-desired stability and protection that they were once known for. This is evident in the current market as well.
Year-to-date the S&P 500 is down 38.96% and the Utilities sub-sector within the index is down 29.82%. Though this is less than the S&P 500, the sector is still down around 30% for the year - which is very high for this sector. On the other hand, the best performing sector consumer-stables is down only 17.02%. On the global level, the SPDR SP International Utilities Sector ETF (IPU), started in July of this year, has a negative return of 29.09% year-to-date.
Overall though utilities have lost their former glory, they must still be an integral part of a well-diversified portfolio. Usually utilities have high yields and are long-term value plays. Some of the foreign utilities have attractive yields and are worth looking into at current levels. The following table lists all these utility stocks with their current yields:
| Company | Ticker | Country | Price | Current Dividend Yield |
|---|---|---|---|---|
| Edenor SA | EDN | Argentina | $4.18 | N/A |
| MetroGAS S.A. | MGS | Argentina | $1.46 | N/A |
| Transportadora de Gas Del Sur S.A. | TGS | Argentina | $1.98 | 3.20% |
| Brookfield Infrastructure Partners L.P. | BIP | Bermuda | $11.75 | 7.52% |
| COMP ENERG CEMIG ADS | CIG | Brazil | $15.83 | 3.46% |
| CPFL Energia S.A. | CPL | Brazil | $43.47 | 9.00% |
| Centrais Electricas Brasileiras S.A. | EBR | Brazil | $11.54 | 2.29% |
| Companhia Paranaense de Energia | ELP | Brazil | $11.84 | 1.33% |
| Companhia de Saneamento Basico do Estado de Sao Paulo | SBS | Brazil | $20.92 | N/A |
| TransAlta Corp. | TAC | Canada | $18.06 | 5.98% |
| TransCanada Corp. | TRP | Canada | $26.37 | 5.46% |
| Consolidated Water Co. Ltd. | CWCO | Cayman Islands | $10.70 | 2.43% |
| Enersis S.A. | ENI | Chile | $13.06 | 5.63% |
| Empresa Nacional de Electricidad S.A. | EOC | Chile | $34.85 | 2.15% |
| A-Power Energy Generation Systems, Ltd. | APWR | China | $4.30 | N/A |
| Huaneng Power International Inc. | HNP | China | $26.95 | 6.31% |
| Veolia Environnement SA | VE | France | $25.14 | 7.51% |
| Korea Electric Power Corp. | KEP | South Korea | $9.30 | N/A |
| Cascal N V | HOO | United Kingdom | $4.42 | 4.07% |
| National Grid plc | NGG | United Kingdom | $52.31 | 3.62% |
Note: All data is as of Nov 28 closing prices.
Half of the listed above are from Latin America. The dividends offered by the Brazilian utilities vary wildly over months. Just three companies from Europe are represented here because some of the European utilities such as E.ON (EONGY) of Germany now trade on the OTC market.
It must be noted however that many of the stocks mentioned above have fallen over 50% so far this year. So some of the current high yields may not offer consolation for investors who bought the stocks earlier at higher prices. However new investors can use the table as a starting point to do further research into the above global utility stocks.
Disclosure: Long VE
Eight Latin American Utility Stocks Traded in New York
Photo: Itaipu Dam, Brazil
In this article lets review the 8 Latin American utility stocks that trade in the New York Stock Exchange. Brazil dominates this list with 4 stocks and Chile and Argentina have 2 stocks each.
People invest in utility stocks for their dividend yields. Unlike other sectors, utility stocks tend to provide some stability to a well diversified portfolio. Some would argue that this assumption may not be true these days due to many risky strategies followed by utilities. There are many risks to investing in emerging market utilities such as political risk, currency risk, interest rate risk, etc.So caution is warranted before picking up some of the stocks mentioned in this piece. For example, countries like Argentina have had their share of economic upheavals.
The table below lists the nine Latin American utilities with the Dividend Yields and Dividend Growth Rate(if available):
| S.No. | Company | Ticker | Country | Sector | Dividend Yield | Dividend Growth Rate(past 5 years) |
|---|---|---|---|---|---|---|
| 1 | Edenor | EDN | Argentina | Electricity | Not paid regularly | N/A |
| 2 | MetroGas | MGS | Argentina | Multiutility | Not paid regularly | N/A |
| 3 | Comp. Paranaense de Energia | ELP | Brazil | Electricity | 1.04% | 24.57% |
| 4 | Companhia Energetica de Minas Gerais-CEMIG | CIG | Brazil | Electricity | 2.85% | N/A |
| 5 | CPFL Energia | CPL | Brazil | Electricity | 8.32% | N/A |
| 6 | SABESP | SBS | Brazil | Multiutility | 5.11% | N/A |
| 7 | Endesa-Empresa Nacional de Electricidad | EOC | Chile | Electricity | 1.74% | 27.20% |
| 8 | Enersis | ENI | Chile | Electricity | 2.56% | 6.20% |
Brief Summary of each stock:
1. Edenor (EDN) - Edenor is the largest electricity distributor in Argentina with a customer base of 7 million mostly in the northwestern and northern Buenos Aires metropolitan area. Edenor’s customers are largely urban residential customers who have low delinquency rates in terms of bill payment.
Since its listing in April 2007, EDN stock has not performed well.The stock is down over 55% in the past 52 weeks. EDN has a market cap of about $441 M and it has not paid a dividend yet. On dividends, the2nd quarter earnings report says “Since the restructuring of the Company’s financial debt referred to in Note 14, the Company is not
allowed to distribute dividends until April 24, 2008 or until such time when the Company’s leverage ratio is lower than 2.5, whichever occurs first.”
2. Metrogas (MGS) - This utility distributes natural gas to about 2.1 million customers in the Buenos Aires area. MGS has a market cap. of about $205M and the stock closed at $3.60 last Friday.The PE is about 37.06 and the company pays no regular dividend.
3.Companhia Paranaense de Energia (ELP) - ELP is an electricity producer and distributor in Brazil.
ELP has a dividend yield of just 1.04% and the PE is 6.69.In the past 5 years, the revenues have grown at an annual rate of about 15% and the annual dividend growth rate has been 24.57%.
4.Companhia Energetica de Minas Gerais -CEMIG (CIG) - CIG is another electric utility in Brazil but has interests in natural gas and telecom as well. It serves 17 million customers in the State of Minas Gerais. 51% of the company is owned by the State of Minas Gerais.
CIG has a dividend yield of 2.85% and a market cap. of $9.6B.A $1000 investment 5 years ago in the CIG ADR would have grown to $3,176.25 as of 9/5/08 including dividend reinvested.Thats a return of 221.37%. (Source: “Investment Simulator”
in the CIG corporate site. Date Range used: 9/5/2004 to 9/5/2008)
5.CPFL Energia (CPL) - CPL is a Brazilian electric utility.From the corporate site: “Operation in the States of Sao Paulo, Rio Grande do Sul, Parana and Minas Gerais, three major economic and industrial centers in Brazil.”
CPL’s dividend yield is 8.41%. CPFL Energia is a member of the Bovespa Index. The company has a policy of distributing a minimum of 50% of the net earnings (payout ratio) on a half-yearly basis.
6.SABESP (SBS): This company provides water and sewage services in the State of Sao Paulo, including the City of Sao Paulo. SBS has a dividend yield of 5.11% but is not paid on a regular basis. Total Revenue has increasing consistently in the past 5 years at a rate of about 9.65%.
7.Endesa-Empresa Nacional de Electricidad (EOC) : Endesa Chile is the largest electricity producer in Chile with operations in Bazil, Colombia, Peru and Argentina as well.
The dividend yield for EOC is 1.74%. Total revenue has grown at a rate of 12.20% in the past 5 years and the dividend growth at 27.20% annually. With 47 hydroelectric plants and operations in 5 countries EOC is a safer bet.
8.Enersis (ENI): Enersis S.A. (Enersis) is another electric utility in Chile. EOC discussed above is one of its subsidiaries. ENI has a dividend yield of 2.61% and a market cap of $10.5B.
Performance of Latin American utility Stocks Year-To-Date (YTD):
Conclusion:
The Latin American utility stocks may not be suitable for all class of investors due to the risks mentioned above and their dividend payment are not stable and consistent. For risk takers there a few more picks trading in the OTC market. But for an investor looking to gain some exposure to the Latin American emerging market utility sector the above table can a good starting point to dig into these companies.
