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Gazprom - An Excellent Dividend Opportunity

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DT Analysis


  • Gazprom shares currently offer investors the potential for a very high return, both in the form of dividends and share price appreciation.
  • However, there are numerous political risks that investors should consider and weigh against the potential returns.
  • Whilst these risks are a drawback, I believe the potential future returns provide ample compensation for this higher level of risk and thus Gazprom shares are undervalued.


Throughout the year I’ve been focused on analysing large companies that tend to ‘fly under the radar’, with the objective of finding undervalued companies sporting an attractive risk-return trade off. My theory being that the lower competition will translate to lower market efficiency and hence a higher risk adjusted return.

Upon completing my research on Gazprom (OTCPK:OGZPY) I was surprised how significantly undervalued this company appears and correspondingly, how high the potential returns appear. Whilst the potential return is very high, there are various unique political risks associated with this investment and thus it’s better suited to investors with a moderately high risk tolerance. This article will provide an analysis of the reasons I believe Gazprom shares present an excellent opportunity for risk tolerant investors.


Image Source: Wikipedia.

Company Overview

Gazprom’s primary business is the production, transportation and sale of natural gas throughout Russia, Europe and soon, China. This natural gas business is the largest in the world, with their proven reserves accounting for an impressive 17% of global total and their gas transmission system being the world’s largest. Whilst this alone is already massive, their operations don’t stop there, as they also operate a large vertically integrated oil company through their majority owned subsidiary, Gazprom Neft.

Since Gazprom is a relatively unknown company I will compare several of their metrics to one of their better known peers to help readers understand the scale of their business. Whilst I cannot quantify the exact extent to which Gazprom is followed, considering their shares have only 10,653 followers on Seeking Alpha versus Exxon’s (XOM) 302,397 followers it indicates they’re underfollowed.

Two observations are easily apparent when comparing their upstream production and downstream refinery throughput, the massive scale of Gazprom operations and their greater exposure to upstream activities, see the chart below. Their gas transmission

This article was written by

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I am no longer active, as I am taking a hiatus from finance to pursue business ventures in other sectors.  I hope that my analysis was helpful to investors across the years, thank you.

Analyst’s Disclosure: I am/we are long OZGPY, XOM, RDS.B. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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