How Luiz Barsi picks stocks
Dividend sectors (BESST)
Who he is
Luiz Barsi Filho is often called Brazil’s best-known individual investor. He began in the 1970s and built his fortune slowly: owning a small set of steady businesses, collecting their dividends and reinvesting them for decades. He sums up the sectors he likes as BESST: banks, electricity, sanitation, insurance and telecom, businesses people keep paying for in good years and bad.
The idea in plain words
Treat a stock like a rental property: what matters is the income it pays every year. Pay only a price at which that income is worth it, which for Barsi means a dividend of at least 6% of the price, and then hold.
This week’s example · first week of November 2026
TAEE11Taesa
Power transmissionTaesa gets paid to keep Brazil's power lines available, rain or shine, and has paid out 9.2% a year on average. Barsi's 6% rule would pay up to R$ 60.22. It closed at R$ 39.59.
Our formula, step by step
- Only banks, electricity, sanitation, insurance and telecom companies (the BESST sectors).
- Profitable and paying dividends five years in a row.
- ROE of at least 12%.
- Payout between 30% and 80% (up to 95% for transmission and insurance).
- Ceiling price = 5-year average dividend ÷ 6%, or earnings × average payout ÷ 6%, whichever is lower.
- The pick is the stock with the biggest discount to its ceiling.
Rules for all four legends
- One company per legend per week, in the order Barsi → Bazin → Buffett → Lynch.
- A company picked in the last 4 weeks is skipped.
- Stocks with a P/E under 3 are excluded.
- Dividends are the dividends and JCP the company actually paid each year (CVM filings), before tax, per share at today's share count.