How to Buy Petrobras Stock

Petrobras (NYSE: stock symbol PBR) is a semi-public Brazilian multinational energy corporation headquartered in Rio de Janeiro, Brazil. It’s the largest company in the Southern Hemisphere by market capitalization and the largest in Latin America measured by 2011 revenues.

Petrobras was founded in 1953. While the company ceased to be Brazil’s legal monopolist in the oil industry in 1997, it remains a significant oil producer, with output of more than 2 million barrels (320,000 m3) of oil equivalent per day, as well as a major distributor of oil products. The company also owns oil refineries and oil tankers. Petrobras is a world leader in development of advanced technology from deep-water and ultra-deep water oil production.

In September 2010 Petrobras conducted the largest share sale in history, when US$72.8 billion worth of shares in the company were sold on the BM&F Bovespa stock exchange. Upon the sale Petrobras immediately became the fourth-largest company in the world measured by market capitalisation.

What is Petrobras Stock worth Today?

Petrobras is currently trading around $27.00 which gives the company a market cap of around $177 billion. This is down on recent years; the company was valued at more than twice as much during 2008.

Petrobras Stock History Chart

Petrobras Stock Price History

Like all companies the Petrobras stock price has suffered of late due to the recession and subsequent weakening of the oil price. The company has yet to fully recover to their pre-recession price of around $60 and therefore represent good value at their current price.

Petrobras Stock Split History

Petrobras has split 2 times since becoming a publicly quoted company. The first of these splits was a 2:1 split and came on Jul 02, 2007 with the price trading at 121.27 the previous day and closed at 62.90 the day after, resulting in a profit of 3.74%.

The second split was also a 2:1 split and came on May 08, 2008 with the price trading at 126.75 the previous day and closed at 63.78 the day after, resulting in a profit of 0.64%.

When Will Petrobras Stock Split Again?

With Petrobras trading around $27.00 and still recovering from the last recession a stock split in the near term isn’t very likely. The stock would need to reach around $120.00 for a split to be considered again and that’s not very likely within the next couple of years at least.

Does Petrobras Stock Pay a Dividend?

Petrobras has been paying a dividend for the last 6 years, for the last 12 months this has amounted to an annual yield of only 0.46%. This is an extremely low dividend, especially for this sector, but Petrobras is a stock to buy for long term growth rather than income.

Should You Invest in Petrobras Stock?

Petrobras is a long standing company with a strong brand in key markets; they’ve performed well over recent years despite challenging market conditions. This hasn’t necessarily been represented fully in the share price however, which at $27.00 is considered undervalued.

Going forward the Brazilian market is fairly mature now, it will show significant growth for the next few years but nothing compared to growth expected in China. What will help revenue and profits is the firming up of the oil price. With oil trading at over $120 per barrel this will drive up both revenue and margins over the next twelve months.

Should you invest in Petrobras? With the oil price rising and the company already undervalued the answer is yes. The target price has been set around $38.00 for the next twelve months and if the oil price remains high that target is sure to be met.

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