Comparing Comp En De Mn Cemig ADS (NYSE:CIG) & Ameren (NYSE:AEE)

Comp En De Mn Cemig ADS (NYSE:CIG) and Ameren (NYSE:AEE) are both utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Earnings and Valuation

This table compares Comp En De Mn Cemig ADS and Ameren”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Comp En De Mn Cemig ADS	$7.66 billion	0.79	$877.05 million	$0.19	11.08
Ameren	$8.80 billion	3.24	$1.46 billion	$5.68	18.13

Ameren has higher revenue and earnings than Comp En De Mn Cemig ADS. Comp En De Mn Cemig ADS is trading at a lower price-to-earnings ratio than Ameren, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Comp En De Mn Cemig ADS and Ameren’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Comp En De Mn Cemig ADS	10.44%	17.20%	7.48%
Ameren	17.86%	10.95%	3.00%

Analyst Recommendations

This is a summary of recent ratings for Comp En De Mn Cemig ADS and Ameren, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Comp En De Mn Cemig ADS	0	1	0	0	2.00
Ameren	0	3	10	0	2.77

Ameren has a consensus target price of $121.42, suggesting a potential upside of 17.89%. Given Ameren’s stronger consensus rating and higher probable upside, analysts clearly believe Ameren is more favorable than Comp En De Mn Cemig ADS.

Insider and Institutional Ownership

79.1% of Ameren shares are owned by institutional investors. 0.3% of Ameren shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Comp En De Mn Cemig ADS has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Ameren has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Dividends

Comp En De Mn Cemig ADS pays an annual dividend of $0.22 per share and has a dividend yield of 10.5%. Ameren pays an annual dividend of $3.00 per share and has a dividend yield of 2.9%. Comp En De Mn Cemig ADS pays out 115.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ameren pays out 52.8% of its earnings in the form of a dividend. Ameren has raised its dividend for 12 consecutive years.

Summary

Ameren beats Comp En De Mn Cemig ADS on 13 of the 17 factors compared between the two stocks.

About Comp En De Mn Cemig ADS

Companhia Energética de Minas Gerais, through its subsidiaries, engages in the generation, transmission, distribution, and sale of electricity in Brazil. The company generates electricity through renewable energy sources, such as water, wind, sun, and biomass; or non-renewable sources, including fossil and nuclear fuels. As of December 31, 2016, it operated hydroelectric plants, thermoelectric plants, and solar plants with a total installed capacity of approximately 8,000 megawatts in 10 states of Brazil. It is also involved in the telecommunications and energy solutions consulting businesses; exploitation of natural gas; sale and trading of electricity; and acquisition, transport, and distribution of gas and its subproducts and derivatives, as well as provision of technology systems and systems for operational management of public service concessions, including companies operating in electricity, gas, water and sewerage, and other utility companies. The company was founded in 1952 and is headquartered in Belo Horizonte, Brazil.

About Ameren

Ameren Corporation, together with its subsidiaries, operates as a public utility holding company in the United States. The company operates through four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. It engages in the rate-regulated electric generation, transmission, and distribution activities; and rate-regulated natural gas distribution business. In addition, the company generates electricity through coal, nuclear, and natural gas, as well as renewable sources, such as hydroelectric, wind, methane gas, and solar. It serves residential, commercial, and industrial customers. The company was founded in 1881 and is headquartered in Saint Louis, Missouri.