Petrobras share: monster dividends and price increase - is it worth investing in 2024?

Petrobras share: monster dividends and price increase - is it worth investing in 2024?

According to a report by www.sharedeals.de, the shares of the Brazilian oil company Petrobras (WKN: 932443) have captivated the hearts of their investors in recent years. The stock's price rose 68% in 2023, and the company paid out monstrous dividends, with a dividend yield of around 20%. The question that now arises is whether the success story will continue in 2024.

Petrobras is a Brazilian oil company active in all areas of energy production. It explores, produces, refines, trades and transports petroleum, oil products, natural gas and other hydrocarbons, is involved in biofuels and renewable energy, and owns an extensive network of pipelines, oil tankers and terminals for the transportation of raw materials. The company's market value is almost $103 billion.

Petrobras shares have proven to be a buy tip in recent years. Despite political uncertainty and volatility due to the presidential election in Brazil, the company recorded strong profits and ample cash flows. However, Petrobras is planning to change its remuneration policy by distributing less percent of its free cash flow in the future. The Brazilian government is seeking increased investments in climate protection, which could theoretically lead to lower distributions.

However, the dividend yield is still well above what other major oil companies pay out. Even if dividends were cut in half, the yield would still be over 10%. Petrobras stock is currently valued at a forward P/E ratio of 4.28, which appears cheap compared to other major oil companies.

The future prospects of the share also depend on the development of oil prices and the economic situation. An increased recession trend or a weakening of the US economy could have a negative impact on oil stocks and Petrobras. Personally, I would wait for a correction after the strong price increase and buy at prices around $15. It should also be noted that preferred stock may benefit from share buybacks and should therefore be preferred.

Overall, Petrobras remains an interesting investment, but one that needs to keep an eye on developments in the oil market and regulatory changes.

Source: www.sharedeals.de