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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks

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To: LLCF who wrote (470)	8/25/2000 3:37:56 PM
From: kingfisher	Read Replies (2) of 11633

Want an oil play? Try royalty trusts From Globe and Mail Friday, August 25, 2000 Given their cyclical nature, oil stocks are hardly the best bet for buy-and-hold investors, but if you like the sector in the long term, look to royalty trusts. Often dismissed as boring, their returns are nothing of the sort. The group as a whole has a two-year total return of 19 per cent (as of June 30), compared with 8 per cent for producers and 12 per cent for integrateds. The knock against trusts is asset depletion, which can eat away at unit prices. If that's a concern, Syncrude's oil-sands trusts are the purest crude oil plays on the market. With reserves estimated at 75 years, the trusts trade at only 60 per cent of net asset value, conservatively estimated, meaning the unit price has room to move. The payout for 2000 is expected to come in at $2.40 per unit, and the yield is now 7.5 per cent. Payouts will fall in the next few years as expansion costs rise but are expected to reach $8 a unit by 2008. If oil prices don't plummet and cost overruns are avoided, tar sands are a good place to be.

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