Is a 34% Yield Sustainable?

Post a Comment


Wealthy Retirement

View in browser


[Cancer shocker] Cereal for breakfast?

There's a city in northern Europe where cancer rates are 4X LOWER than they are here...

And researchers have traced it back to what they eat for breakfast.

See what this popular cereal can do to cancer cells right here:

1 common breakfast cereal reprograms cancer cells?

The cancer-fighting secret in this cereal used to be on every breakfast table in America... until it was abandoned for something more "convenient." See it here.

Can Petrobras Continue to Pay a 34% Yield?

Marc Lichtenfeld, Chief Income Strategist, The Oxford Club

Marc Lichtenfeld

Over the last four quarters, Brazilian oil company Petróleo Brasileiro (NYSE: PBR), also known as Petrobras, paid out dividends equaling $3.79 per share. With its stock price just over $11, that comes out to a yield of 34%.

Can Petrobras shareholders expect a similar payout in 2023?

Under normal circumstances, perhaps.

In 2021, free cash flow was $32 billion. Petrobras hasn't reported fourth quarter 2022 results yet. When it does, free cash flow for the full year is projected to come in at $31.5 billion, just below the previous year's level.

For 2023, however, free cash flow is expected to be down drastically - falling all the way to $13 billion, as newly elected President Luiz Inácio Lula da Silva has ordered the company to increase capital expenditures.

The projected $13 billion in free cash flow in 2023 would not come close to covering 2022's $22 billion estimated dividends paid.

Chart: Petrobras' Declining Free Cash Flow Is a Problem for Its Dividend

Petrobras does not have a good track record when it comes to paying shareholders dividends. It eliminated the dividend in 2014 and did not pay one again until 2018.

Petrobras' largest shareholder is the Brazilian government. As a result, the dividend has become the plaything of recent presidents.


U.K. Living Legend Warns U.S.:
Devastating Announcement Could Change American Retirement Plans Forever

"Things are about to get a whole lot worse for some... and MUCH BETTER for those who pay attention to THIS indicator." - Alpesh Patel, Officer of the Order of the British Empire

Click here to see how you could protect and grow your wealth.

Last year, then-President Jair Bolsonaro needed more funds for the Treasury, so he ordered Petrobras to pay more dividends, which it did.

Now President Lula is demanding the opposite - that the company spend more on capital expenditures, lowering prices and reducing the dividend.

Wall Street predicts dividends paid will drop by about two-thirds, which is still enough for a double-digit yield.

But when your largest shareholder is the federal government and the president says, "Jump," your CEO says, "How high?"

Or in this case, when the president says, "Cut," the correct answer is, "How low?"

Petrobras will still generate plenty of cash flow and pay shareholders a healthy dividend, but it will be nowhere close to the artificially inflated dividend of the past year.

Petrobras' dividend will be lower in 2023.

Dividend Safety Rating: F

Dividend Grade Guide

If you have a stock whose dividend safety you'd like me to analyze, leave the ticker in the comments section.

Don't forget to check to see whether I've written about your favorite stock recently. Click on the word "Search" on the upper right part of the page, type in the company name and hit enter.

Good investing,


Leave a Comment
Explore the Wonders of Israel, Jordan and Egypt

Recession? Depression? You Haven't Seen Anything Yet! If you think the "Nixon Gold Shock" was bad... you've got to see this. Click here for a video that will scare you into action.

Use This Signal to Avoid Falling Stocks.


Here's what inflation does to your money...

Inflation Devouring Money

With inflation devouring the savings of retirees across the country...

You need a plan.

Fortunately, we've discovered that one group of stocks DOMINATES the market during times of high inflation.

Click here to discover the No. 1 investment. (Hint: It's not gold or crypto.)

Related Posts

There is no other posts in this category.

Post a Comment

Subscribe Our Newsletter