Permian Basin Royalty Trust (PBT)

Great dividends? Absolutely! Based on today’s price ($21.87) and TTM distributions ($2.1325), PBT yields 11.6% annually, with distributions made every month.

Additionally, there can be share price appreciation over time. During the last 12 months, PBT shares are up 48.5%. So total return during the last year has been 60%! Astounding!!

There wasn’t much price movement until March ’08, when shares set a trading pattern with $20.41 as the closest resistance level. If oil prices stay around $120 - $130/bbl and natural gas around $14/msf, production and expenses level, distributions should be around $0.21-0.23/month. This would create a target price of $22.65. If oil returns to $130/bbl on average, PBT’s 11.6% yield drives the target price to $23.56.

A royalty trust distributes 90%+ of its income to unitholders in the form of dividends. In this respect they are like REITs, though REITs’ portfolios often (again, until recently) appreciate. Oil/Gas Royalty Trusts theoretically could waste away as the properties’ resources are tapped dry. But PBT has known reserves of 8.8 years.

Somebody has to pay taxes on the trust’s income. Usually dividends are double-taxed: first by the company, then by the shareholder. Not so with the royalty trust: only the unitholder pays.

Are there risks? Consider the following:

(1) As interest rates rise, the share price may fall so that the yield improves.
(2) Oil and natural gas prices may drop, resulting in lower income for the trust, lower yield, and a falling share price.
(3) Royalty Trusts cannot acquire new properties, so they will deplete over time, thus reducing share price as production drops.

Fortunately none of these risks are impacting PBT. But, during this month, oil prices dropped 4% and PBT’s share price got hammered – a 17% drop this month! Based on my math, this is a big market over-reaction. I’m keeping my PBT, collecting the current distribution of 23½¢ per share, and fully expecting oil to go back above $130 …and my PBT shares to recover completely and continue to increase in value during 2008.

Hopefully royalty income is considered when looking at out vs under is considered. At a 9-10% dividend, I see this as the most obvious of choices. Steady income with little downside risk.

Unless their is a major change in energy useage I feel this stock should continue to outperform the market. It pays a great montly divicend and has had good capital appreciation over the last few years. While I don't expect the major increase in valuation that has happend in the past few years to continue. It will continue to return a nince dividend and should still continue to appreciate in price as oil and gas prices incerease.

This is a solid energy stock paying reliable dividends on a monthly basis. They have had no problems doing this through the ups and downs of the energy market and are not likely to in the future either. The only possilbe drawback is that this is set up as a Royalty Trust here in the United States and is limited by U.S. rules which do not allow them to buy more properties and add to the Trust. If they run out of oil on their properties - they are all done. They should be good for at least five (5) years before that happens though. Re-Investing the monthly dividend should make for a nice long-term profit no matter what else happens politically here in the U.S.

My ears are turned to the politics, and I may be rolling the dice here, but it does look to me like domestic production will likely become the new political fad.

That may mean new tax breaks, maybe even a "buy American oil" sentiment? Pretty much everything lines up under domestic oil to "help it". Given how precarious everything financial is right now, I like that.

This oil royalty trust is a conservative way to go long on oil. Current Dividend is 13.52%. P/E 12.3. Growth is showing up at 20%. If the analyst that said oil will be at $120 per barrel in August 09 is right then earnings growth will be even greater. Collect your 13.52% and wait for your appreciation.

Financials and homebuilders continue to reel, inflation fears, lagging US economy. Where or where is a "safe" investment? Today I'm adding a couple of US oil/gas trusts (BPT, PBT) for their "safe divvys" and limited downside potential over the next year (oil would have to go under $80 for me to worry about reductions in their distributions.) I'm financing these purchases with shorts in 3 big Wall Street firms (MER, GS, and MS), as I anticipate further deterioration amid more bad news in financials. Note: my CAPS portfolio IS my real portfolio, with the exception of a couple of micro-caps (EDAP, NTRZ, FMTI) that I can't pick in CAPS.

The price of oil is likely to remain high. Permian Basin oil is a relatively steady income from a reliable field. The nearly 10% return is nice and buffers volatility. Longevity of reserves is a long term concern. PBT is one of the few energy royalty trusts that is primarily oil based and not Canadian, where tax issues for US investors are problematic.

Besides distributions of cash for shareholders (April 30 $ .1776 per share) this stock offers a 7.8%- 9.8% dividend yield. Mke this one a portion of your IRA or SEP and know you got a lock on the increase in oil for the next 20 years. I got in on the recent dip at $22.55 a share.

Small royalty trust that produces both oil and natural gas. Monthly distributions. Share price seems to fluctuate more in the warmer months. If it goes below $15, I'll be adding to my position.

The world peak of oil production appears to have been in 2005 or 2006. Oil prices will continue to climb until 2020 and beyond because China is increasing its demand steeply and supply is dropping to an effective zero by 2050.

Excellent Yld. return on this pipeline trust at least for the next 2-3 yrs.

We need more energy. Time for a rebound

Yeilding over 17% rated a buy by Rueters, Long market Edge stock is hanging around the $20 but not losing much ground compared to the general market.

This pick in the oil gas & consumable fuels industry is a strong buy (LN). buy at 21.09 and check in 12-18 months.

Oil and Gas royalty trust pays a monthly dividend. At $18 per share this is priced for $75 bbl oil.

The massive global sell offs and Oil prices dropping are affecting this. I think the oil prices will eventually go up and this stock will follow with it. Plus it has a nice dividend

Scarce oil and current income. Doesn't get any better.

This has been a steady performer, dividend-wise but as gas falls, I think I might be looking at a decline.