Petrobras: Don't Fall In Love With The Double-Digit Dividend Yield

Summary

  • Petrobras currently offers a massive dividend yield.
  • This isn't a fixed dividend however. It's a variable payout policy currently juiced up by high oil prices.
  • Brazilian politicians have put the high dividend under scrutiny given surging domestic fuel prices.
  • An upcoming presidential election adds to the uncertainty.
  • Petrobras stock isn't a bad investment at current prices, but I prefer other energy names.
  • Looking for a helping hand in the market? Members of Ian's Insider Corner get exclusive ideas and guidance to navigate any climate. Learn More »
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Petrobras (NYSE:PBR) is South America's largest oil company and one of the world leaders in developing new offshore oil fields. It has produced an incredible amount of oil over the years, and at times been a compelling - if volatile - investment.

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This article was written by

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Ian Bezek is a former hedge fund analyst at Kerrisdale Capital. He has spent the decade living in Latin America, doing the boots-on-the ground research for investors interested in markets such as Mexico, Colombia, and Chile. He also specializes in high-quality compounders and growth stocks at reasonable prices in the US and other developed markets.

Ian leads the investing group Ian's Insider Corner. Features of the group include: the Weekend Digest which covers everything from new ideas to updates on current holdings and macro analysis, trade alerts, an active chat room, and direct access to Ian. Learn More.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SU,XOM either through stock ownership, options, or other derivatives. 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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