COPEL: Hold It Until The State No Longer Owns It And Receive Dividends Meanwhile

Summary

Brazilian utility company COPEL is expected to undergo equity restructuring, potentially leading to the State of Paraná losing control and reducing its equity to around 10%.
Dividend distribution will probably decrease until 2024, but the yield will still be satisfactory at current price levels.
Despite trading at historically high multiples, COPEL’s share price still has potential upside in the medium term, and long-term operational efficiency could bring higher returns for investors.
The restructuring is necessary for COPEL to raise funds to renew three important hydroelectric plant concessions, which are crucial for the company’s future cash flows.
Regardless of the scenario, those who own the stock now should stick to them for a couple more years for the almost certain rewards.

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