It’s over. The seven-week battle over dividends at oil stock Petrobras (NYSE:PBR) has finally reached a conclusion. And shareholders, who are very happy with the outcome, sent shares up nearly 3% in Friday afternoon’s trading session.
Despite a back-and-forth between shareholders and government agencies, the seven-week battle has concluded, and shareholders landed just over $4.3 billion in dividend payouts. The government, which actually controls Petrobras, was planning to withhold the payment altogether but ended up agreeing to pay out half of the “available extraordinary dividends,” a compromise which seemed agreeable enough for all concerned.
Given that the Brazilian government, as the largest shareholder of Petrobras at 50.3%, will be the largest recipient of that dividend, the government figured it was a good idea to pay out, as it plans to use that cash to balance a budget deficit.
Expansion Plans
Petrobras won’t just be paying out cash, either; it’s already got new plans for expansion efforts afoot. Reports note that Petrobras plans to shell out $73 billion into a slate of initiatives geared toward ramping up production and staging new exploration ventures. This means more platforms, more boats for maritime support and cabotage, and disposing of older units. As a result, Petrobras will add around 100,000 jobs, which no doubt will perk the Brazilian government’s interest.
Is PBR a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PBR stock based on three Buys and four Holds assigned in the past three months, as indicated by the graphic below. After an 85.88% rally in its share price over the past year, the average PBR price target of $17.64 per share implies 3.1% upside potential.
Is PBR the Right Stock to Buy for Passive Income?
Before you hurry to invest in PBR, think about the following:
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