Hi Condor - Note that on most trusts there is a delay of about 3 months from the sale of natural gas to the monthly payout - oil is about 30 days shorter.
Right now NG prices are headed down, but the figures you see as % dividend come from last months payout, based on May or June prices, and today's stock price.
In my opinion, the stock prices do not yet fully reflect the low gas and oil prices.
One good thing about O& G trusts is since you can hold them for a long time, you can usually take a little more time to study them.
While they tend to be similar, there are some differences.
Peyto has a presentation on their web site that compares a number of Canadian trusts.
Some Examples -
Vermillion Ca:VET.un Has many project outside of Canada, and gets different oil prices.
Paramount has very high payouts of short lived reserves, and has some Alberta tax credits. Stock can be very volitile.
Peyto only pays a little, and ploughs most cash flow into drilling more long life resereves.
SJT San Juan Trust - Is in the US, and thus has no Canadian witholding. They cannot buy more land, but they have held production steady or increased it slightly the past 5 years with long life reserves. Gas is in New Mexico. Stock tends to be one of the least volitile.
ERF is Canadian, it is large and liquid, trades on NYSE, and put and calls are available.
There are several trusts that trade on US exchanges, and they are usually marginable at most brokers.
Also, many trusts have DRIP programs, allowing the dividends to buy more stock, often at a discount.
Kurt Wulff at www.mcdep.com covers a number of US and Canadian Energy Trusts. It's worth looking at his web site. |
