How Décio Bazin picks stocks

6% yield rule

Who he is

Décio Bazin was a Brazilian investor and the author of “Faça Fortuna com Ações” (Make a Fortune with Stocks), a classic among Brazilian dividend investors. He argued that a stock that pays you nothing is like a painting on the wall: you can only hope someone pays more for it later. His 6% rule is the reason Brazilian investors talk about a “preço-teto”, a ceiling price.

The idea in plain words

A stock earns its place only while its dividend yields at least 6% a year. Divide the average dividend by 6% and you get the most worth paying. Bazin also watched debt closely: a big yield from a company drowning in debt is a trap, not a bargain.

This week’s example · first week of November 2026

CMIG4Cemig

Electric utility

At today's price, R$ 100 of Cemig stock paid R$ 12.50 in dividends over the last twelve months. Profit has grown 11.3% a year, and the shares trade near book value, 32.9% below Bazin's ceiling.

Discount to ceiling32.9%Price R$ 10.07 vs ceiling R$ 15.00: room before the formula calls it too expensive

5-yr avg dividend yield8.9%About R$ 8.90 a year in cash per R$ 100 invested, on average

Dividend yield, last 12 months12.5%Close to the 5-year average

Net debt / EBITDA2.0xModerate debt for the cash it generates

Read the full note →

Our formula, step by step

Any Ibovespa stock.
Dividends paid five years in a row.
5-year average dividend yield of at least 6%.
Payout of 75% or less.
Net debt/EBITDA below 2.5 (banks and insurers: ROE of at least 12% instead).
The pick is the biggest discount to the 6% ceiling; one-off dividend years are capped.

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.

Every Bazin pick so far