Dividend portfolio: see the most recommended stocks to invest in December

For the composition of the most recommended stock portfolio for dividends in December, the CNN Brazil Business compiled the suggestions of eight banks and brokerages. The nominations were: Genial, Santander, Banco do Brasil, Warren, XP, BTG Pactual, Terra and Ativa Investimentos.

Engie’s shares were the most recommended (5) for investors who want to receive greater shares of company profits, followed by CPFL, Petrobras and Eletrobras, all with 3 recommendations each.

In the month of December, the market is watching the PEC of the Explosion, which propose the removal of the Bolsa Família from the limit of the spending ceiling, and with the speculation of several names to compose the Ministry of Economy.

“In general, we have an expectation of a name that will not fully “please the market”, removing the benefit of the doubt and placing as a condition a rule that brings guarantees for a fiscal result that does not compromise the country’s Debt/GDP ratio” , says the Genial Investimentos report.

Regarding Engie’s recommendation, BTG Pactual highlighted that the company has “a solid track record of good capital allocation, along with one of the best management teams in the world”. Basic Services Sector.

In addition, the results obtained by the company in the 3rd quarter of 2022 were positive, with a generation adjusted EBITDA of R$ 1.34 billion, an increase of 30% y/y.

See the dividend portfolio of CNN Brazil Business for the month of December.

Highlights

Engie

Action: EGIE3

Comment: BTG Pactual

BTG understands that the company has a solid track record of good capital allocation, along with one of the best management teams in the industry.

In order to diversify its operational portfolio, Engie officially entered the transmission segment with the energization of its Gralha Azul transmission line in Paraná, the advanced construction of the transmission line in Pará and Tocantins (RAP of the two lines of R$ 670 million), and investment in the segment via M&As – at the auction in June of that year, the company won a new line with Copel.

In this 3rd quarter, the company presented good results, with an adjusted EBITDA of Generation of R$ 1.34 billion, an increase of 30% y/y.

According to BTG, the results were achieved due to the increase in average energy sales prices (+8% y/y to R$224.8/MWh), the new capacity with the acquisition of the Paracatu and Floresta solar plants in Mar- 22, and lower personnel costs (-43% y/y).

The transmission segment posted EBITDA of R$115 million, 14% above our estimate of R$101 million. In addition, the bank mentions that the company achieved a goal of having 100% of its energy production composed of clean energy, totaling 8.1 GW of installed capacity derived from renewable sources.

OK

Action: VOUCH3

Comment: Santander

Vale is a Brazilian multinational, founded eight decades ago in the city of Itabira (MG). It is a global reference in the mining sector, with iron ore production as its main business. Its other production fronts range from manganese, copper, aluminum to the electricity sector.

The bank assesses that Vale is well positioned within the global iron ore industry, its most important division. “We expect the demand for high quality iron ore to remain decent in the short term, benefiting the company due to the increase in the S11D project (located in the municipality of Canaã dos Carajás, in the southeast of Pará), which increased the supply of the higher quality commodity. company quality.

As drivers for the recommendation, Santander cites the stronger resumption of industrial activity in China; the maintenance of iron ore prices at high levels; distribution of dividends and share buyback programs; and the possible spin-off or IPO of the Base Metals division, which could unlock value for the company.

The risks raised by the institution are the significant reduction in Chinese steel production, leading to a drop in demand for iron ore, considering that China represents approximately half of the global demand for this product; the significant increase in liabilities related to the rupture of the Brumadinho dam; the rapid appreciation of the real, which may increase cash costs of iron ore measured in dollars; the drop in nickel and copper prices; and unexpected capacity additions by competitors.

Itaú Unibanco

Action: ITUB4

Comment: XP

In November, the shares of Itaú Unibanco (ITUB4) fell, interrupting a sequence that would go to the fifth consecutive month of increases. In November, the shares depreciated by 14.5%, above the Ibovespa and in line with the IFNC (-6.3% and -14.3% in the same period, respectively).

The assessment is that this performance stems from the movement towards greater risk aversion after the election results, which culminated in the devaluation of assets in Brazil.

Despite the drop in the month, the brokerage reiterates that Itaú continues to operate more efficiently among the large Brazilian banks, “which puts it in a good position to navigate the challenging macroeconomic scenario that is to come”.

XP indicates the following differentials: Itaú with a very healthy coverage ratio (and above the historical average) while keeping default rates under control; the company has good exposure to consumer credit lines, which are growing rapidly; solid track record of M&As and partnerships; it’s the valuation attractive.

“We have a Buy recommendation and target price of BRL 31.0/share for the end of 2022”.

Source: CNN Brasil

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