AES Brasil (AESB3) is an old acquaintance in the energy sector on the stock exchange, and a subsidiary of the American energy group AES. The group owned a considerable part of the former Eletropaulo, which was sold to Enel in 2018, and has since operated in the renewable sources segment. Investors know AES Brasil (AESB3) shares mainly for their dividends.
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But what will have been the return of the company’s common shares on the stock exchange in 6 months? And in a year? A Financial Intelligence did the math to find out.
How much did AES Brasil (AESB3) shares yield?
AES Brasil shares have been rising this month, following the release of the company’s third quarter financial results last Monday (6). The share has risen 0.99% since the beginning of November, according to data from Estadão Broadcast.
A Financial Intelligence consulted experts to understand the trajectory of the stock and find out how much AES Brasil shares would yield in six to 12 months, two years and five years.
Return of AES Brasil (AESB3) in 6 months
If the investor had bought shares in AES Brasil (AESB3) six months ago, today he would actually have made a loss. This is because the shares gave a negative return of 19.31%, excluding dividends. The calculations are by Júlio Souza Borba, analyst at Benndorf Research. In other words, the stock went from R$12.69 to R$10.24 until the market closed this Monday (13).
Payback in 1 year
After a full year with AES Brasil shares, the investor would already start making a profit. The shareholder who kept the stock in his portfolio for 12 months obtained a profit of 4.07%. Therefore, the stock went from R$9.84 to R$10.24.
With dividends, the shareholder’s return would be 4.08% in the period.
Return in 2 years becomes negative again
The investor who held AES Brasil shares until this Monday (13) for two years “would also be losing money”, says Gustavo Gomes, head of variable income strategy at Acqua vero. The energy generation company’s shares fell 11.34% in this period.
Two years ago, the shareholder would have bought the stock at R$11.55 and observed a drop to R$10.24.
Considering the amount of R$ 10.74 per share paid in dividends over 24 months, the shareholder’s loss would be lower, 9.92%.
Dividends turn losses into profits for those who held shares for 5 years
Borba, from Benndorf, calculates that the shareholder who held AES Brasil shares in their portfolio for five years would be profitable. The profit, however, would come from the factor that makes it known on the stock market: dividends.
Since November 2018, the company has distributed dividends 13 times, while at the same time transferring Interest on Equity (JCP) three times. “The company paid good dividends mainly between 2019 and 2020”, says Gomes.
Over a period of five years, AES Brasil (AESB3) shares “moved sideways” on the stock market, according to Gomes’ explanation. The stock accumulated a drop of 0.78%.
But according to the calculations of the Benndorf Research expert, the dividends would increase the shareholder’s profit to 19.72%. The paper, with dividends, would have cost R$8.55.
How much does AES Brasil pay in dividends?
The shares are known for distributing dividends to shareholders since, in 2022, AES Brasil had a payout of 66%. In other words, it passed on two thirds of its net profit to shareholders. In total, the profit passed on to shareholders was R$0.11 per share (AESB3) last year.
How much does a share of AES Brasil (AESB3) cost?
The price of AES Brasil’s common share (AESB3) is R$10.24. This is the value of the paper until the end of trading on the Brazilian stock exchange, B3, until this Monday (13).
AES Brasil x Small Caps index (SMLL)
AES Brasil (AESB3) is part of the Bovespa Small Caps Index (SMLL). The company, despite belonging to an index for smaller companies, has a market value of R$6.12 billion.
See below how much AES Brasil shares yielded in comparison to its reference index. The table disregards distributed dividends:
|AES Brazil (AESB3)||Small Caps (SMLL)|
|-19.31%% in 6 months||8.46% in 6 months|
|4.07% in 1 year||-0.47% in 1 year|
|-11.34% in 2 years||-14.88% in 2 years|
|-0.78% in 5 years||27.43% in 5 years|
Is it worth investing in AES Brasil (AESB3)?
In the view of the variable income team at Acqua Vero Investimentos, the third quarter results of AES Brasil (AESB3) were “weaker and slightly below expectations”. The reported adjusted EBITDA of R$422 million is 3% lower than the brokerage’s expectations.
The energy generator’s net profit was R$124.4 million, a 20% jump in the third quarter compared to the same period in 2022. Still, it was another indicator that disappointed market estimates, points out Gomes.
“What this means, in the end: even though AES Brasil has a relevant margin, net profit was still below expectations”, adds Gomes. The broker expected net revenue of around R$153 million.
AcquaVero Investimentos’ target price for AES Brasil (AESB3) shares is R$11, “an upside that is not so relevant given the risks” that the company offers, concludes Gomes.
Financial Intelligence is a journalistic channel and this content should not be interpreted as a recommendation to buy or sell investments. Before investing, check your investor profile, your objectives and always stay well informed.