Gazprom (OGZPY)

Gazprom (OGZPY)

Postby winston » Fri Aug 10, 2018 12:54 pm

not vested

Russian Stocks to Buy: Gazprom (OGZPY)

Whereas Rosneft dominates the oil sector, Gazprom (OTCMKTS:OGZPY) stands as the dominant natural gas company in Russia.

While many may have seen Gazprom’s advertising during the World Cup hosted by Russia, few investors know it well.

In fact, it wields tremendous market and geopolitical power, making it one of the more compelling Russian stocks to buy.

Due to its vast reserves and proximity to its Western neighbors, it serves as the dominant natural gas company within Europe. The Russian government also holds majority ownership, so it remains powerful politically.

However, like several Russian companies today, it offers a compelling valuation. OGZPY stock currently trades at just over four times earnings. The stock also trades at a PB ratio of 0.26.

This places its market cap at about $49 billion, even though its stockholders’ equity amounts of almost $190 billion! This gives Gazprom a larger equity position than either Sberbank or Rosneft.

Due to currency fluctuations, dividends vary. However, the current dividend comes in at just over 25 cents per share. This amounts to a dividend yield of about 5.7%.

The stock has also suffered from a long-term slump. At just under $4.50 per share, it trades more than 85% below the record high of $30 per share it reached in 2008.

I do not forecast a surge to the record high anytime soon. Indeed, investors face perils in this market that they would not encounter with a U.S. stock. It also faces competition from Rosneft, who wants a more prominent role in the natural gas industry.

However, OGZPY stock offers the chance for investors to buy the dominant company in one of Russia’s most important sectors for just over 25% of its book value. That factor in itself should draw interest.

Source: Investor Place
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