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CEMIG (CIG) to Sell Interest in Light, Aims Deleveraging

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Brazilian integrated electric utility, Companhia Energetica de Minas Gerais (CIG - Free Report) , also known as CEMIG recently announced that it has decided to commence the sale of its entire equity interest in Light S.A. The move is in sync with the company’s disinvestment plan for deleveraging its balance sheet.

In the last one year, the American Depository Receipts of the stock yielded 13.47% return, outperforming 0.60% decline of the Zacks categorized Utility Electric Power industry.

As revealed, CEMIG owns roughly 43.38% stake in Light S.A. through its subsidiaries Rio Minas Energia Participações S.A. (RME) and Luce Empreendimentos e Participações S.A. (Lepsa).

Earlier in the month, CEMIG announced its disinvestment plan designed primarily to bring down its net debt/EBITDA ratio to 2.5x in the near term. The company has selected a portfolio of assets for disinvestment including Taesa, Transmineira, Gasmig, Cemig Telecom and Gas exploration concessions. The assets either have high liquidity or are not expected to provide returns in the short term or are non-strategic to the company’s business profile.

Zacks & Key Picks        

CEMIG currently has a $2.95 billion market capitalization and carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include RWE AG (RWEOY - Free Report) , Algonquin Power & Utilities Corporation (AQN - Free Report) and Atlantic Power Corporation . While RWE AG sports a Zacks Rank #1 (Strong Buy), both Algonquin Power & Utilities and Atlantic Power Corporation carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

RWE AG’s earnings expectations for 2017 and 2018 have improved over the past 60 days. Its five-year earnings growth rate is predicted to be 11.20% compared with 6.40% for the industry.

Algonquin Power & Utilities Corporation performed well in the last quarter, with an earnings surprise of 11.76%. Earnings estimates for second-quarter 2017 have improved in the last 60 days.

Atlantic Power Corporation pulled off an average positive earnings surprise of 98.53% for the last four quarters. Also, earnings expectations on the stock improved for the second quarter and full-year 2017 in the last 60 days.

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