Brazilian stocks have been not performed well in recent months. The Bovespa is down 3.5% so far this year compared to a rise of 1.7% for the S&P 500. However Brazil’s economy continues to grow, though at a lower pace than last year. The economy is projected to grow by 5.5% this year.Currently plenty of opportunities abound at attractive prices for long-term and yield-hungry investors. Those looking to gain some exposure to Brazilian equities can consider the fast-growing electric utility sector as this sector benefits strongly from economic growth.
Brazil has the third largest electricity sector in the western hemisphere after the U.S. and Canada.The majority of electricity generated in Brazil comes from hydro-power and the country is a net exporter of electricity. Despite privatization efforts launched in 1996, the bulk of the electricity sector remains under the control of the government. Eletrobras, the state-owned power company is still the dominant player in the market. The Brazilian government also owns almost the entire electricity transmission network. (Source: Energy Information Administration)
Eleven Brazilian utilities trading on the U.S. markets are listed below their current dividend yields and prices:
1. Companhia Energetica de Minas Gerais – CEMIG (CIG)
Current Stock Price: $17.62
Current Dividend Yield: 6.83%
Current value of $10,000 invested five years ago: $20,728
In addition to electricity generation and distribution, Cemig is also engaged in natural gas distribution and telecom services.
2. COPEL – Companhia Paranaense de Energia(ELP)
Current Stock Price: $26.14
Current Dividend Yield: 1.09%
Current value of $10,000 invested five years ago: $31,358
COPEL operates 18 power plants, 17 of which are hydroelectric plants and is a major supplier of power in the state of Parana.
3. CPFL Energia SA (CPL)
Current Stock Price: $79.24
Current Dividend Yield: 7.14%
Current value of $10,000 invested five years ago: $28,238
CPFL Energia served about 6.6 million consumers at the end of 2009.
4.Aes Tiete SA (OTC:AESAY)
Current Stock Price: $13.41
Current Dividend Yield: 9.59%
AES operates owns and operates ten hydro power plants in the state of Sao Paulo.
5. Centrais Eletricas de Santa Catarina SA (OTC:CEDWY)
Current Stock Price: $24.15
Current Dividend Yield: 2.23%
The company operates 12 power plants in the state of Catarina.It is also engaged in the distribution of natural gas and drinking water.
6. CTEEP Companhia de Transmissao de Energia Eletrica Paulista (OTC: CTPTY)
Current Stock Price: $26.44
Current Dividend Yield: Not Available
CTEEP’s principal customers are other electric utilities such as CPFL, Elektro, Bandeirante, Grupo Rede, Duke-Paranapanema, AES Tietê and CESP. And through the National Interconnected System it is linked to Furnas, CEMIG, Eletrosul, Copel, ETEO and Light.
7.Companhia Energetica De Sao Paulo (Cesp) (OTC:CSQSY)
Current Stock Price: $12.97
Current Dividend Yield: 0.46%
8.COPEL – Companhia Paranaense de Energia (OTC:ELPVY)
Current Stock Price: $22.10
Current Dividend Yield: 1.56%
9.Light SA (OTC:LGSXY)
Current Stock Price: $16.49
Current Dividend Yield: 6.39%
10.MPX Energia SA (OTC:MPXEY)
Current Stock Price: $23.90
Current Dividend Yield: Not Available
11.Tractebel Energia SA (OTC: TBLEY)
Current Stock Price: $15.38
Current Dividend Yield: 3.16%
Note: Stock price and dividend data noted above are as of Mar 18, 2011
Data source: S&P and others
Disclosure: No Positions
