#9 - Petrobras (NYSE:PBR)
Petrobras (NYSE: PBR) - Petrobras, whose formal name is Petroleo Brasileiro, is a vital part of the Brazilian economy. However, as the country's state-run oil company it became part of the political story when the company was embroiled in a bribery scandal that eventually resulted in the impeachment of the country's former President Dilma Rouseff (who was also the former chair of Petrobras). The new regime is looking to distance itself from the day-to-day operations of the company, which could lead to the company being able to privatize. And in other good news for investors, the company recently announced it may cancel their quarterly dividend payments in an effort to accelerate their debt reduction plans. It remains to be seen whether the government will truly be able to take a laissez-faire attitude towards a company that is so vital to the country’s economy. This is particularly true in the face of volatile oil prices. But the stock price has been showing modest gains and could be set to go even higher if they do indeed become a private entity.
About Petróleo Brasileiro S.A. - Petrobras
Petróleo Brasileiro SA - Petrobras explores, produces, and sells oil and gas in Brazil and internationally. The company operates through three segments: Exploration and Production; Refining, Transportation and Marketing; and Gas and Power. The Exploration and Production segment explores, develops, and produces crude oil, natural gas liquids, and natural gas primarily for supplies to the domestic refineries.
Read More - Current Price
- $14.75
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 5 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $18.24 (23.7% Upside)
Political risk is just one of many risk factors that can affect the profitability, and stock performance, of a business. The risk to some sectors – like defense contractors and the oil and gas industry – is fairly obvious and is usually happens as a series of predictable spasms, usually revolving around election cycles. But the political risk for other sectors and businesses can be harder to see coming. Political risk is seen as a long-term risk because, although it can be difficult to quantify, it will increase over time simply because the geopolitical landscape is constantly changing. Those changes will tend to reward some sectors and increase the risk premium to others. And political risk is inherent in more than just domestic stocks. International companies have had a lot to digest from U.S. policy in the last 12 months, yet still have to factor in issues such as terrorism, riots, and civil wars in the countries in which they do business.
The best way to protect yourself from political risk is through information. In this slide show, we’ve shown you nine companies whose stock could be facing a downside risk due to geopolitical events. From this list, you can probably begin to think of other companies in the same sectors that may be affected. You may even have some of those stocks in your portfolio. By investing in our MarketBeat All Access service, you can get instant alerts on the stocks you’re following along with access to our premier research platform so you can tune out the noise of the mainstream financial media and focus on the information that impacts your portfolio.
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