We recently upgraded our recommendation on Brazilian electric
Companhia Paranaense de Energia
), also known as COPEL from Neutral to Outperform.
Why the Upgrade?
The world economy is on the revival path after the lows it
experienced post the 2008 crisis. Emerging nations are speeding
their way to recovery and are projected to grow 5.3% in 2013 and
5.7% in 2014, according to the International Monetary Fund (IMF).
Brazil, which is among those nations with bright growth
prospects, is worth mentioning here. Government spending has been
accelerated to improve the country's infrastructure. Also,
growing trade relations with other economies as well as huge
foreign direct investments bode well for the country.
Talking of the electricity industry in Brazil, demand is growing
with energy consumption projected to rise by 5.9% annually,
according to the Ministry of Mines and Energy's (MME) ten-year
plan till 2019. Plans have been made to enhance Brazil's total
installed capacity for electricity generation from 112 megawatts
to 167 megawatts by 2019.
For COPEL, the long-term growth prospects are very bright. To
leverage benefits from the apparent demand growth, the company is
making serious efforts to improve its generation capabilities and
improve its services.
Apart from its core business, COPEL has expanded its reach in
other businesses including telecommunications, natural gas,
engineering, water, and sanitation services.
Other Stocks to Consider
COPEL is a fully integrated electric utility of Brazil engaged in
the generation, transmission, and distribution of electricity to
the State of Paraná. The company currently has a $4.4 billion
Stocks, other than COPEL, worth a look in the industry are
CPFL Energia S.A.
), with a Zacks Rank #1 (Strong Buy) while
DTE Energy Company
), each has a Zacks Rank #2 (Buy).
ALLETE INC (ALE): Free Stock Analysis Report
CPFL ENERGI-ADR (CPL): Get Free Report
DTE ENERGY CO (DTE): Free Stock Analysis
COPEL-ADR PR B (ELP): Free Stock Analysis
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