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Strategies & Market Trends : Dividend Investing
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To: DividendGrowth who wrote (373)6/2/2009 12:06:41 PM
From: mek42   of 387
 
In my experience, oil royalty trusts (US and Canadian) tend to be priced to give 10 - 15% yields. The current dividend yield (based on the most recent $0.05 monthly dividend and price of $12.25) is just under 5%. Unless oil keeps increasing in price, driving PBT's dividend up (US and Canadian oil is more expensive than overseas oil, so US and Canadian oil trusts see more oil pumped, thus greater dividends when oil is priced high) I would expect the price of PBT to drop to the $7 - $10 range.

A key difference between US and Canadian oil trusts is that the US trusts are not allowed to acquire new fields, while the Canadian trusts are. So one should consider oil field reserves / longevity as part of one's due diligence in making investment decisions regarding US oil trusts.

Best of luck with your investing!
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