L ittle known in the U.S.,Enersis ( ENI ) is one of the largest electric utilities in Latin America. The Chile-based company has generation, transmission and distribution operations in Argentina, Brazil, Colombia, Peru and its native country. It serves nearly 15 million customers in the region.
Enersis last week reported Q1 results that topped expectations. The company's earnings before interest, taxes, depreciation and amortization (or EBITDA) rose 27%.
Better-than-expected results from the distribution businesses in Argentina and Peru and good results from the Endesa Chile subsidiary drove Q1 results, analysts at Itau BBA said in a research note.
Enersis announced last month it is studying a reorganization that would separate its generation and distribution activities in Chile from businesses outside Chile.
The reorganization would eliminate some redundancies "that currently result from the Enersis Group's complex corporate structure," the company said. Eventually, the resulting companies that own stakes in businesses outside Chile would be merged.
On Wednesday, Chilean regulators said they'll investigate the proposed restructuring to make sure it complies with anti-monopoly laws. Enersis said it will cooperate fully.
"Although we see (Q1) results as positive, we believe that the stock is likely to experience considerable volatility until management clarifies how the restructuring plan will be carried out and how it will be paid," Itau added. It kept an outperform rating.
Enersis, which is 60.6% owned by Italy-basedEnel Group , did not break out its dividend payment per share. But IBD calculates an annualized dividend of 48 cents a share, for a yield of about 2.6%.
The stock broke out past the 18.06 buy point of a long consolidation on April 23. Shares remain in buy range.