Friday, January 9, 2015

$PBR $PBR-A is not Your Typical $7 Per Share Stock Read Why Here

Petrobras shares are trading at about $7 per share on the U.S. ADR market.  This is not your typical $7 per share stock.  For the preferred shares, the dividend paid this year to shareholders was 77 cents per share.  The earnings this year, which will determine the dividend in 2015, have not changed much.  For this reason, you just do not see a lot of companies, let alone an oil stock trade this low with that high of a dividend.  Real estate stocks do, but this is a different animal and Petrobras has no shortage of oil.  Once the corruption issue is resolved and the Brazil economy starts to expand, I have no doubt that this stock price will correct to higher levels.

Disclosure, I am long PBR and PBR-A.

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