In a significant shift within Brazil's stock market recommendations for April 2025, Petrobras (PETR4) has emerged as the top choice among analysts, surpassing Itaú Unibanco (ITUB4) and solidifying its position as a favorite for investors seeking robust returns. According to a survey by Money Times, Petrobras garnered 16 recommendations, while Itaú and Vale (VALE3) received 14 and 11, respectively. This surge in interest for Petrobras comes amid a broader positive trend in the Ibovespa, which saw a 17% increase in dollar terms during the first quarter of 2025, fueled by a foreign capital influx exceeding R$ 13 billion for the year.
Despite a decline in the premium for maintaining stocks, which has dropped to 3.9%, it remains above the historical average, indicating continued investor confidence. Analysts from financial institutions like XP and Safra have expressed optimism about Petrobras's short-term performance, suggesting that discussions surrounding capital expenditures (capex) will not adversely affect the company's results. The anticipated strong dividend distribution of approximately US$ 11.7 billion further enhances the attractiveness of Petrobras shares.
Petrobras's prominence in the stock recommendations is further underscored by its consistent cash generation capabilities. As the company continues to expand its production, supported by new investments in capex for 2024, analysts highlight its solid financial metrics and governance structure as key factors contributing to its appeal.
April's recommendations also show a notable shift for Itaú, which fell to second place with nine recommendations, down from 11 in March. Meanwhile, Vale has made a significant leap from sixth to third in the rankings, thanks to six buy recommendations, a move attributed to the recovery of iron ore prices and a stronger industrial activity in China. According to Santander, the factors driving Vale's potential appreciation include dividend distribution, stock repurchase programs, and unlocking value through minority sales in its Basic Metals division.
Additionally, Eletrobras (ELET3) has gained traction among investors, with increased exposure due to the completion of an arbitration agreement with the government, bolstering its status as a company with dispersed capital. While not as highly recommended as Petrobras, Eletrobras's growing presence highlights the shifting dynamics in the energy sector.
Fitch Ratings has reaffirmed Petrobras's credit ratings, maintaining its local and foreign currency ratings at 'BB' and its national rating at 'AAA(br)', all with a stable outlook. Analysts note that Petrobras's dominance in fuel supply, coupled with its extensive hydrocarbon reserves, supports its healthy financial metrics and low leverage even in a challenging oil price environment.
Looking ahead, Petrobras's production is projected to reach 3 million barrels per day by 2027, driven by successful reserve renewal campaigns and the initiation of new platforms. This growth trajectory positions Petrobras as a compelling investment option for those focused on dividend yields and long-term capital appreciation.
For dividend-focused investors, Petrobras and Banco do Brasil (BBAS3) stand out as the primary choices for 2025, promising robust and consistent returns. Petrobras, in particular, has been highlighted as a top pick in the oil sector, receiving 14 recommendations across 16 portfolios from banks and brokerage firms, including a notable endorsement from BTG Pactual.
Petrobras has already announced two upcoming dividend payments of 35 cents per share, scheduled for May 20 and June 20, 2025. Projections for the year suggest an annual dividend of R$ 4.19 per share, translating to a yield of 12% with a safety margin exceeding 100%. Investors who acquired Petrobras shares at prices below R$ 35 are likely to find the outlook for appreciation and dividend returns particularly enticing.
Banco do Brasil, while trailing Petrobras, also maintains a strong position in the dividend rankings with nine recommendations. Analysts forecast a return on equity (ROE) of 21% for Banco do Brasil in 2025, reflecting its robust growth and favorable funding structure. Expected dividends of R$ 3.14 per share yield an impressive 11.2%, with a safety margin of 87%. Regular dividend payments are anticipated, with the next announcement set for May 12, followed by another advance payment in June.
In summary, both Petrobras and Banco do Brasil present attractive opportunities for investors seeking solid dividends and long-term growth. Petrobras, with its strong dividend potential and production expansion, is well-positioned for those looking to invest in the oil sector. Meanwhile, Banco do Brasil continues to impress with its financial strength and reliable dividend policy.
As the market evolves, these two stocks are likely to remain key players in the dividend landscape, offering investors a unique combination of high yields and stability.
