CEMIG: Behind The 11% Yield At This Brazilian Utility Monopoly

Cemig is a state-controlled Brazilian utility operating as a natural monopoly in the state of Minas Gerais. I rate CIG as Hold; operational improvements since 2019 are largely priced in. Despite trading at low multiples, governance risk, slow growth rates, and FX exposure temper the upside. I expect the current 11% yield to come under pressure from rising capex, increased leverage, and higher interest expenses. What I am watching is potential AI data center demand and improved trading arm risk management that can provide moderate upside from today's $2 price. Companhia Energética de Minas Gerais - CEMIG (CIG) is a well-run, state-controlled utility company in Brazil operating in the state of Minas Gerais. CIG has a wide natural monopoly network of pipes and wires to serve its customers.