Understanding the Dividend Dynamics of Petroleo Brasileiro SA Petrobras
Petroleo Brasileiro SA Petrobras (PBR, Financial) recently announced a dividend of $0.42 per share, payable on an unconfirmed future date, with the ex-dividend date set for 2024-04-26. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Petroleo Brasileiro SA Petrobras's dividend performance and assess its sustainability.
What Does Petroleo Brasileiro SA Petrobras Do?
Petroleo Brasileiro SA Petrobras is a Brazil-based integrated energy company controlled by the Brazilian government. The company focuses on exploration and production of oil and gas in Brazilian offshore fields. Production in 2023 was 2.8 million barrels of oil equivalent a day (80% oil production), and reserves stood at 10.9 billion boe (85% oil). At end-2023, Petroleo Brasileiro SA Petrobras operated 10 refineries in Brazil with capacity of 1.8 million barrels a day and distributes refined products and natural gas throughout Brazil.
A Glimpse at Petroleo Brasileiro SA Petrobras's Dividend History
Petroleo Brasileiro SA Petrobras has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Petroleo Brasileiro SA Petrobras's Dividend Yield and Growth
As of today, Petroleo Brasileiro SA Petrobras currently has a 12-month trailing dividend yield of 17.74% and a 12-month forward dividend yield of 13.09%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, Petroleo Brasileiro SA Petrobras's annual dividend growth rate was 212.80%. Extended to a five-year horizon, this rate decreased to 145.40% per year. Based on Petroleo Brasileiro SA Petrobras's dividend yield and five-year growth rate, the 5-year yield on cost of Petroleo Brasileiro SA Petrobras stock as of today is approximately 1,578.80%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Petroleo Brasileiro SA Petrobras's dividend payout ratio is 0.78, which may suggest that the company's dividend may not be sustainable. Petroleo Brasileiro SA Petrobras's profitability rank of 7 out of 10 as of 2023-12-31, suggests good profitability prospects. The company has reported net profit in 6 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Petroleo Brasileiro SA Petrobras's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Petroleo Brasileiro SA Petrobras's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Petroleo Brasileiro SA Petrobras's revenue has increased by approximately 21.30% per year on average, a rate that outperforms approximately 60.14% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Petroleo Brasileiro SA Petrobras's earnings increased by approximately 35.20% per year on average, a rate that outperforms approximately 67.35% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 35.80%, which outperforms approximately 85.37% of global competitors.
Next Steps
In summary, Petroleo Brasileiro SA Petrobras's robust dividend yield and growth rates present an attractive proposition for investors seeking income. However, the sustainability of its dividends, as indicated by the payout ratio and profitability metrics, warrants close scrutiny. With a solid growth outlook, Petroleo Brasileiro SA Petrobras appears poised to continue its dividend payments, but investors should monitor the company's financial health and industry trends. Will Petroleo Brasileiro SA Petrobras maintain its strong dividend performance in the face of global economic fluctuations? Value investors should keep a close eye on these factors. For those interested in exploring further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
