Petrobras (NYSE:PBR) reported Q1 results after the close Thursday, beating estimates, gushing cash and showering shareholders with dividends. The controversial oil company committed to very significant shareholder returns in 2021, and appears to be following through on those commitments: Earnings - the company generated $1.32 in earnings per share (ADR adjusted), against Street expectations for $1.04. Cash flow - after adjusting for net working capital headwinds, free cash flow for the quarter came in at ~$8.8B, or ~10.2% of the current market cap; free cash flow was reduced by a one-time pension liability payment of $1.3B. Capital allocation - pursuant to the company's 60% free cash flow payout policy, which now includes an option for "special" dividends, the board authorized an $8.2B dividend for Q2 (9.5% yield) and a $1.5B dividend (1.7% yield) to be paid out of profit reserves -- the total dividend payment announced Thursday equates to ~11.2% of the market cap. Guide - guidance was unchanged. Following a historic deleveraging, the Petrobras (PBR) board committed to extraordinary shareholder returns in late 2021. In December, Goldman upgraded shares to buy, citing the change in capital allocation strategy. Goldman forecasted a 31% dividend yield at the time. Since, shares have risen ~23%, while oil (USO) has risen by 50%. Suggesting the variable payout structure could result in an even higher yield than Goldman first estimated. Petrobras (PBR) brings risk. Later this year, former President and felon Lula da Silva is likely to be re-elected President. He's spoken at length about the role Petrobras (PBR) has to play in reducing fuel costs for Brazilians. During his first presidency, Lula required Petrobras to sell diesel and gasoline below market prices, driving losses in the company's downstream segment. Much has changed at Petrobras (PBR) since, as Brazil has developed its offshore resources by partnering with Shell (SHEL), Total (TTE) and other majors. Brazil is now a major oil exporter. Nevertheless, risks stemming from the upcoming election loom large, causing many investors to shy away, despite incredible dividend payouts.