Is PBR a Good Dividend Stock? (56% Dividend Yield)

Today we’re gonna look at another stock that I’ve gotten a lot of requests to go over, which is Petrobras, ticker PBR. They’re a Brazilian company that explores for, produces, and sells oil and gas in Brazil and internationally. Petrobras engages in prospecting, drilling, refining, processing, trading, and transporting crude oil from producing onshore and offshore oil fields. They have expertise in deepwater and ultra deepwater exploration and production as a result of being in business for more than 50 years. They’re also one of the largest publicly traded companies in Latin America with over 45,000 employees and have a market value of 89.9 billion US dollars. Their stock currently trades on the New York Stock Exchange since the year 2000, and as I’ll go into more detail, this company has been through some pretty big changes and some pretty serious scandals over the years.

Their stock currently trades for $11.40 per share and you can see it’s currently offering an insanely high dividend yield of 56.70%. I’m assuming that’s why so many people have been asking about this stock, since I’m sure people haven’t just all of a sudden become interest in Brazilian oil and natural gas companies. The huge dividend yield was a good indicator to me upon first seeing this that Petrobras was probably either an energy company or a shipping company, which have been paying out massive dividends this year. But at 56.7% this should be a red flag that somethings going on, because even a lot of companies like REITs and BDCs which are required to pay out 90% of their earnings in the form of dividends don’t offer yields anywhere close to what Petrobras is offering. So let’s take a deeper look into this company and try and determine if this is a good investment worth considering.

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