Monday, February 23, 2009

Canadian Oil Royalty Trusts: Oil and High Yield Plays

If you think the price of oil is heading back up, but you want high income for protection, you should consider Canadian Oil Royalty Trusts. These Canadian Income Trusts, also known as Canadian Oil Income Trusts or Canadian Royalty Trusts pay a very high income. The trusts pass through all their earnings and deductions 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. 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.
Some of these have extremely high yields which may not be sustainable, but even if they are cut to a third, the yields would still be high.

Pengrowth Energy (PGH) has been paying dividends since July 2004. The stock has a P/E of 7, with a yield of 25.3%.

Provident Energy Trust (PVX), has been paying monthly dividends since October 2002, has a PE of 4 and pays a yield of 16.2%.

Advantage Energy Income (AAV), has paid dividends since April 2004. The stock has a PE of 4 and a yield of 33.5%.

To get an Excel database list of all the US-traded Canadian Income Trusts, which you can download and sort, go to

Author does not own any of the above. Please note: these very high yields may not be sustainable.


1 comment:

Prakash said...

coolest posts ever seen dude

thank u very much