With the price of oil dropping below $40 a barrel for several days, the prices of the Canadian oil royalty trusts have dropped substantially. These Canadian Income Trusts, also known as Canadian Oil Income Trusts or Canadian Royalty Trusts pay a very high income. These trusts pass through all their earnings from oil and gas wells to the trust holders, similar to real estate investment trusts. There is no taxation at the corporate level since they are structured as trusts. Also, a portion of the dividends may be non-taxable due to depletion and depreciation deductions.
You should be aware that the Canadian government came out with a plan to tax all Canadian trusts at the corporate level beginning in the year 2011. However, the average yield from Canadian trusts is still higher than the U.S. royalty trusts. WallStreetNewsNetwork.com recently came out with an updated database list of Canadian Oil Royalty Trusts. Below is a list of some of the Canadian Royalty Trusts that are traded on United States stock exchanges.
Pengrowth Energy (PGH) has been paying dividends since July 2004. The stock has a P/E of 9, with a yield of 28.1%.
Provident Energy Trust (PVX), has been paying monthly dividends since October 2002, has a PE of 5 and pays a yield of 22.6%.
Advantage Energy Income (AAV), has paid dividends since April 2004. The stock has a PE of 8 and a yield of 28.7%.
To get an Excel database list of all the US-traded Canadian Income Trusts, which you can download and sort, go to WallStreetNewsNetwork.com.
Author does not own any of the above. Please note: these very high yields may not be sustainable.