CEMIG ADR Dividend Falls 10.4% to $0.043

Companhia Energética de Minas Gerais’ CIG dividend fell 10.4% to $0.043 per share from $0.048. The new rate went ex-dividend on July 2, 2026, and the next ex-dividend date is September 28, 2026.

Why the dividend changed

The reduction is best understood as a change in the cash distribution attached to CIG’s American depositary receipts, rather than a conventional cut to a fixed quarterly dollar dividend. CIG represents CEMIG preferred shares on a one-for-one basis, according to depositary Citibank. CEMIG declares shareholder distributions in Brazilian reais, while the depositary converts them into dollars and accounts for applicable withholding and fees. The dollar amount can therefore vary with the underlying distribution and currency conversion.

Citi’s dividend record classifies the July 2 distribution as a cash payment and currently marks the rate as preliminary. CEMIG’s June shareholder notice separately declared interest on equity in reais. That structure matters because CIG’s successive dollar distributions can comprise different underlying payments and are not equivalent to a fixed US quarterly coupon. There was no stock split, merger or spinoff associated with the lower rate.

The operating backdrop was stronger than the dividend movement alone suggests. CEMIG reported second-quarter EBITDA of R$2.24 billion, adjusted EBITDA of R$2.47 billion and net income of R$945 million. Distribution EBITDA benefited from a tariff adjustment, lower post-employment expenses and improved energy-loss performance, while the trading business was hurt by higher power-purchase prices and an arbitration provision.

Capital demands also remain substantial. CEMIG invested R$3.28 billion during the first half, principally in regulated operations, and completed the acquisition of additional solar plants. Net leverage ended the second quarter at 2.58 times, while 81% of debt was scheduled to mature in 2029 or later. The company described its cash generation as robust but continued to prioritize network investment, renewable expansion and a longer debt-maturity profile.

Dividend track record

The recent ADR history is uneven. The July 2, 2026, payment of $0.043 followed $0.048 on May 14, 2026, and $0.043 on March 30, 2026. Although the payment frequency is classified as quarterly, the dates and amounts show that CIG’s distributions do not follow the stable cadence commonly associated with US utilities.

Annual totals reinforce that variability. Payments rose 106.3% to $0.20 in 2021 and increased 16.6% to $0.24 in 2022. The total then fell 19.0% to $0.19 in 2023, rose 41.2% to $0.27 in 2024 and fell 30.3% to $0.19 in 2025. The number of payments also changed, from six in 2024 to three in 2025, making calendar-year comparisons sensitive to timing.

The recorded dividend-growth streak stands at 2 consecutive years, while the last annual cut year is 2023. The five-year annualized dividend growth rate is 26.9%, but that average masks large movements between individual years. For income tracking, the payment schedule and the ADR conversion process are at least as important as the long-run growth rate.

Is the dividend covered?

The dividend consumes 80% of earnings. That leaves a limited earnings cushion relative to a company paying out a smaller portion of profit, particularly while CEMIG is funding a large regulated-infrastructure program and managing exposure to volatile energy-trading results.

SmarterDividends gives the dividend a safety score of 54 and a grade of C, classified as borderline (50-65). In plain terms, current earnings cover the distribution, but the margin is not wide enough to treat each payment as highly secure. The variable ADR history also means safety should be assessed across a full payment cycle rather than from a single quarterly amount.

Yield and valuation

CIG’s $0.15 annual dividend produces a 7.00% forward yield at a $2.07 share price. That compares with a 4.36% median forward yield for the Utilities sector. The higher yield compensates for a less predictable payment pattern and thinner earnings coverage than the headline income rate might imply.

SmarterDividends’ fair-value estimate is $6.19, with the shares classified as undervalued and carrying 189% upside to that estimate. The estimate is a valuation benchmark rather than a forecast, and the gap should be viewed alongside currency exposure, the variable ADR distributions and CEMIG’s capital requirements.

What to watch

The next scheduled ex-dividend date is September 28, 2026. Investors should monitor Citi’s final depositary notice for the definitive ADR terms because the administrator currently labels the related cash rate as preliminary. The underlying form of each CEMIG distribution, including whether it is a dividend or interest on equity, also affects the cash ultimately associated with the ADR.

CEMIG’s third-quarter results are scheduled for November 12, 2026. The relevant operating markers include execution of the regulated-investment program, leverage, the effect of tariff adjustments, energy losses and whether trading pressures persist. Those items will show how much financial flexibility remains after investment and shareholder distributions.