Investors point to preferred stocks in the energy sector

In recent days, investors’ attention has been focused on the Eletrobras privatization process, with analyzes that point to a potential for up to 85% appreciation for the company’s shares on the Stock Exchange, a result of efficiency gains when it is no longer under the state control.

It is not just Eletrobras, however, that has attracted the attention of investors.

With more defensive characteristics (stocks that generally do not cause scares, even in times of crisis) and known for being good dividend payers, companies in the energy sector have been present in the portfolios of fund managers, with a focus on transmission, generation or distribution. .

The generators are responsible for the effective production of energy, with hydroelectric operations and renewable sources such as wind and solar, while the transmission companies are responsible for making the midfield between the energy produced by the generators and the distributors.

Distributors, in turn, are the ones that take energy to the final consumer, and are more susceptible to demand fluctuations according to the economic scenario.

The essential nature of energy and the operating rules of the electricity sector give companies in the segment greater predictability, which mitigates the average volatility of their shares on the Stock Exchange.

Stocks in the energy sector tend to appreciate below the market average, in moments of euphoria and a strong rise in the Ibovespa, but when pessimism takes hold and the stock exchange in general goes through a period of sharper decline, company shares Electric plants tend to resist the gale more.

In the 12-month period, up to June 10, while the broad stock index Ibovespa recorded a drop of 18.9%, the IEE (Electric Energy Index) of the B3 had a more modest decline, of 6.61%.

Partner and analyst at asset manager Perfin, Marcelo Sandri says that, in addition to Eletrobras itself, he also carries the shares of Alupar, Auren Energia (formerly Cesp) and Equatorial in the funds’ portfolio.

The main focus of the selected companies, says Sandri, is in the areas of transmission and renewable energy generation, considered to be more predictable from the perspective of future cash generation in the long term.

“The sector has regulatory stability and is quite predictable with regard to cash generation. And in this context of crisis, there are companies whose demand is inelastic, less susceptible, therefore, to the impacts of the population’s loss of income”, says the partner of Perfin, adding that the contracts are adjusted for inflation, which guarantees a real gain for the companies and for their shareholders.

Sandri also says that, in addition to the appreciation of shares on the stock exchange in the long term, investors are also usually attracted by the distribution of dividends characteristic of electric energy companies.

The specialist calculates between 6% and 7% the annual dividend yield (proportion distributed in dividends in relation to the value of the share on the stock exchange) of the electric companies in Perfin’s portfolio.

The manager’s partner understands that, in general, the energy sector shares are priced below what could be expected – what the market calls excessively discounted -, due to the sale by investors who intended to buy shares in the Eletrobras offer.

The shares of the until then state-owned company already accumulated a high of about 20% in the year, but may rise even more, according to Sandri, as the efficiency gains with the new management of the company materialize.

“Eletrobras today is highly inefficient, from the perspective of costs in relation to the installed generation capacity, which is almost double the average of private companies in the sector. With privatization, the company should have the opportunity to reduce costs by half , or even more than that”, says the Perfin partner, who invested in the stock offering.

CEO of manager Finacap Investimentos, Luiz Fernando Araújo says that, in addition to Eletrobras, in the funds’ portfolio since the middle of last year, due to the expectation of post-privatization efficiency gains, he also has shares of companies in the sector such as Transmissão Paulista, AES Tietê , Taesa, Cemig and Energisa.

“We really like the electricity sector, especially the generation and transmission part, with around 20% of the fund’s portfolio exposed to the segment”, says Finacap’s CEO, who calculates the dividend yield for the electrical companies in the portfolio.

He says that the electrification of the economy in the long term, with the transition from fossil fuel to alternatives with less climate impact still at an early stage, tends to boost demand from electricity generators in the long term. One such factor will be the increasing adoption of electric cars.

According to Finacap’s CEO, the discussions in Brasilia about a possible reduction in the electricity bill, in the event of approval of the bill that limits the ICMS rate to 17%, should have a positive impact for electric companies in general.

This is because, with the relief in the price of energy charged, the tendency is for a reduction in the default of overdue bills, encouraging an increase in the use of energy by the population, says Araújo.

Equity manager at AF Invest, Leandro Saliba says that, in addition to Eletrobras, he also has a position in Neoenergia, more focused on the area of ​​electric energy distribution.

Even though companies in the distribution segment are more susceptible to the macroeconomic environment — with delays in paying bills and reduced consumption by the population and by companies — Saliba says he sees Neoenergia at a price well below what is justified, considering the results operating expenses that the company has presented in the last quarterly balance sheets.

“We think the company is extremely cheap”, says the manager of AF Invest. He states that Neoenergira charges, on average, up to 25% cheaper than peers that also operate in distribution, such as Equatorial, for example, which makes its business more resilient in low economic growth scenarios, with less impact. from default to results.

Saliba adds that Neoenergia has recently made important investments to improve the quality of the distribution network in the markets where it operates – Bahia, Pernambuco, Rio Grande do Norte, São Paulo, Mato Grosso do Sul and the Federal District.

The amounts spent —about BRL 6.1 billion in 2021— were considered quite high by investors in general, says the AF Invest manager, who says he does not agree with the prevailing market view of operations growth strategies. from Neoenergia.

“We are very optimistic about the company’s role and we see a potential for appreciation of about 90% in the next 2 years”, says Saliba.