Petrobras: Is Oil Giant's Mighty 23.3% Dividend Yield Worth the Risk?

 | Nov 13, 2023 22:00

  • Brazilian oil giant's net profit fell in 3Q22
  • On the positive side, the company announced $3.57 billion in dividends
  • InvestingPro sees positive signs for the future
  • Secure your Black Friday gains with InvestingPro's up to 55% discount !

    • One of the world's largest oil and gas exploration, production and marketing companies, Petroleo Brasileiro Petrobras (NYSE:PBR) released its Q3'23 earnings last Thursday, November 9. Although the figures were slightly disappointing on a first impression, with a big drop in profit,

    Source: InvestingPro

    h2 Petrobras Stands Out Among Its Peers/h2

    Comparing Petrobras with other oil giants around the world, you can see that the company also stands out as an investment opportunity. We put the Brazilian company side by side with Shell (NYSE:SHEL), BP (NYSE:BP), Exxon Mobil (NYSE:XOM), and Chevron (NYSE:CVX).

    The company has the highest upside potential in fair value and the lowest P/L. The runner-up in price upside, for example, is BP, with "only" 23.2%. BP's EV/EBTIDA is slightly lower, trading at 1.8x. But it's worth noting that all the oil companies mentioned are still underpriced and trade at low valuation multiples.

    The Brazilian company also has the best Financial Health score (3.52), followed by BP (3.01) and Shell (3.0) with a B rating, while Exxon Mobil and Chevron have a C rating. Petrobras is also, by far, the best dividend payer on the list, with a DY of 26.6%, with Exxon Mobil in second place (6.1%).