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

investing.com:

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, InvestingPro still sees an interesting future for the Brazilian giant.

Let's take a deep dive into the stock's fundamentals to understand whether the Brazilian giant's mighty 23.3% dividend yield is worth the risk.

Petrobras reported a 42.2% drop in net profit in 3Q23 compared to the same period in 2022, reaching US$ 5,5 bi. Sales revenue also fell 26.6% year-on-year, to $25.5 billion. The negative figures are credited to the devaluation of the Brazilian real against the dollar and the high price of Brent oil last year, leading to higher numbers at the time.

On the other hand, there are also positive points in the November balance sheet. Adjusted EBITDA fell 27.6% in the year, to $13.5 billion, but rose 16.8% in the quarter. Net Debt also fell to $43.7 bi, 7.9% lower than in 2022. Operating Cash Flow fell 10.6% compared to last year, to $11.5 bi, but is still the fourth highest in the company's history.

Petrobras' Market Capitalization closed the week at almost $96.8 billion. Remember that in October the company had the highest market value in its history, reaching $106 billion.

The company also announced the payment of $3.57 bi in dividends in February. The cut-off date (ex-dividends) will be November 22, so anyone who wants to take advantage of the company's mighty 23%+ yield needs to buy it this week still.

On the other hand, the market is raising doubts about governance at Petrobras. The oil company is due to submit to shareholders a