Wagner Meier/Getty Images News
Petrobras (New York Stock Exchange:PBR) -9.6% in Friday trading, as a disappointing dividend payment reflects investor frustration with CEO Jean Paul Prates, who has tried to balance shareholder interests with the Brazilian government's desire to invest more capital in renewable energy projects.
the company's board of directors approved 1.10 reais per share, or 14.2 billion reais ($2.9 billion), in fourth-quarter dividends, but paid no special dividends for the entire year; Goldman Sachs said $3 billion to $4 billion in extraordinary dividends were expected, on top of the default year-end payment.
The message is “very clear: investors should expect only minimal dividends for Petrobras,” JP Morgan analysts write, saying the fourth-quarter payout represents a dividend yield of 8.1% in 2024, “substantially below the of their peers that normally offer returns of 10%”. “
Petrobras (PBR) was also hit by rating downgrades by several analysts, including Bank of America, Bradesco BBI and Banco Santander.
The decision not to announce a special dividend “increases the perception of risk at PBR and also suggests that the company could be pivoting towards a more growth-focused agenda (leading to increased capital spending and M&A),” it says. BofA by reducing the stock to Neutral from Buy.
Santander analysts downgraded Petrobras (PBR) to Neutral from Buy, saying the company has sent “mixed signals regarding the near-term capital allocation strategy,” and Bradesco BBI believes “flows could move away from Petrobras toward Chinese oil companies given the recent change in capital. discipline and strong buyback programs,” which also downgraded the stock.
ETF: (EWZ)
