Brazilian Electric Utility Stocks Offer Dividend and Growth Potential

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Among the emerging market countries, power consumption in Brazil is projected to rise significantly in the next few years. The population of the country is expected to increase from 192 million to 204 million by 2013. Accordingly electric power consumption is forecast to rise by 10%. The government is also expanding the Luz Para Todos (Light For All) program to provide electricity to more families.By the end of this year , the program would supply electricity to 3.4 million families.

In November 2009, the country’s 26 states experienced a major blackout.Since that time due to rising income levels and low unemployment, power consumption has been increasing steadily. Currently hydro power is the major source of electricity generation in Brazil. Due to drought and other risks, the country may increase its dependence on coal and nuclear power in the future. The world’s second largest dam, Itaipú dam hydroelectric power plant that straddles the border between Brazil and Paraguay supplies 50% of the electricity in Brazil. There are only two nuclear power plants in the country.

Brazil’s Sources of Electricity Generation

brazil-electricity-generation-sources

Source: www.powermag.com

Electricity Consumption Per Capita in BRIC countries



Investors looking to pick up emerging market utility stocks may consider the following Brazilian electric utilities for the reasons mentioned above:1. Centrais Eletricas Brasileiras (EBR)
Current Dividend Yield: 1.90%2. Companhia Energetica de Minas Gerais (CIG)
Current Dividend Yield: 2.43%

3. Aes Tiete SA (OTC:AESAY)
Current Dividend Yield: 13.53%

4. CPFL Energia (CPL)
Current Dividend Yield: 7.85%

In addition to electricity generation and distribution, Companhia Energetica de Minas Gerais (CIG) is also engaged in the distribution of natural gas and has operations in Chile as well.The largest private sector power company CPFL Energia S.A.(CPL) has about 6.6 million customers and it plans to expand its wind energy business.

The Most Profitable Greek Companies

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The 13 most profitable publicly-listed companies in Greece that made it to the Forbes Global 2000 list for this year are listed below:

[TABLE=496]

Source: Forbes

National Bank of Greece(NBG) topped the ranking with profits of $2.15B. It is interesting to note that Coca Cola’s local division appears among the top five and seven banks are in this list of thirteen highly ranked powerful Greek companies.

The Top 20 Greek Companies by Market Capitalization

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The FTSE/ATHEX 20 Index is composed of the 20 largest Greek blue chip companies that are listed in the Athens Stock Exchange.The constituents in this index are selected based on the market capitalization.

The Components of the FTSE/ATHEX 20 Index as of May, 2015 are:

S.No.Name
1Alpha Bank A.E
2Corinth Pipeworks SA
3Ellaktor
4Eurobank Properties Reic
5Folli Follie SA
6Frigoglass SA
7HEL Petroleum SA
8Hellenic Exchanges SA
9Hellenic Telec ORG NAM
10Intralot S.A.
11Jumbo SA
12Marfin Investment Group
13Metka SA
14Motor OIL (HELLAS) Refineries
15Mytilineos Holdings SA
16National Bank
17Opap SA
18Piraeus Bank
19PPC SA
20Terna Energy
21Titan Cement CO
22Viohalco S.A.

Note: Index Data as of May 25, 2015

Source: Euroinvestor

FTSE/ATHEX 20 Five Year Performance Chart:

 

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Some of the index constituents available as sponsored ADRs are National Bank of Greece(NBG) and Alpha Bank(OTC: ALBKY).

There is no country specific ETF for Greece in the US markets.The Lyxor MSCI Greece ETF trades on the Euronext Paris with ticker GRE. This ETF tracks the MSCI Greece index.

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The Top 10 Greek Banks by Assets

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The Top 10 banks in Greece based on assets held is listed below. The $141 billion bailout package put together by European Union and the International Monetary Fund should help Greece from bankruptcy. Germany is expected to contribute $28b to this bailout fund and the plan has been approved the German parliament.

One of the main areas that will get the attention of Greek regulators and politicians is the country’s banking system since a sound banking system is the backbone of any economy. Hence investors are currently interested in evaluating the Greek bank stocks as they may rebound sharply from current levels.

The Top 10 Greek Banks by Assets Held:

[TABLE=494]

Source: Highlights of the Greek banking sector 2008-2009, Deloitte

National Bank of Greece (NBG) closed at $2.67 on Friday. The 52-week high is $8.37.On April 30th, S&P maintained its”Sell” recommendation of NBG. Alpha Bank (OTC: ALBKY) ended at $1.80. However this year Greek banks are projected to have improved deposit margins. Other banks that trade as Unsponsored ADRs include Agricultural Bank of Greece S.A. (OTC: ABGEY), EFG Eurobank Ergasias S.A. (OTC: EGFEY), Marfin Popular Bank Public Co. Ltd. (OTC: MYPSY) and TT Hellenic Postbank (OTC: TTHPY).