With the global attention on the World Cup in Brazil and the crisis in Iraq, Petrobras (NYSE: PBR), the major Brazilian oil producer, is at the confluence of events. Like ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX), Petrobras is an appealing oil firm for long term investors. Many previous articles on this site have detailed the long term allure of Big oil stocks like Chevron and ExxonMobil.
Petrobras has certainly been rewarding for short term investors as it is up more than 11 percent for 2014 (chart below).
The trend is very bullish for Petrobras, too. It is up for the last month, quarter, six months, and year of market action. It has been a great quarter for Petrobras, up nearly 20 percent.
There is much to make investors bullish about the future for Petrobras for value, growth, and income investors.
For value investors, it is trading at deep discounts for both sales and asset values. It is much cheaper than Chevron, ExxonMobil, and other Big Oil entities in this regard. Investors can buy cheap and wait for the market to catch up to the value of the sales and the assets.
It has the same appeal for growth investors.
The forward price-to-earning ratio for Petrobras is less than 7. For Chevron, it is nearly 12. ExxonMobil has a forward price-to-earning ratio of more than 13. Growth for Petobras is priced much cheaper than for the others!
As with Big Oil, income investors do very well with Petrobras, too.
The dividend yield for Petrobras is 5 percent. That is almost twice that for ExxonMobil. The dividend yield for Chevron is only 3.27 percent. The appeal of Petrobras to income investors is obvious, especially in a low interest rate environment.
No matter who an investor is rooting for in the World Cup, Petrobras should be a winning addition to a portfolio for the long term!