I recently installed Google Analysis to my website with the help of Eric from Stock Market Prognosticator. I have had 2,639 Visitors from over 50 countries to my blog in the past month. I wanted to write a post specifically for my readers outside the US.
Canada is my largest audience after the US with about 25% of viewers. So I will start with my favorite Canadian stock: Penn West Energy Trust (PWE)
PWE is the largest conventional oil and natural gas producing income trust in North America. Based in Calgary, Alberta, Penn West operates throughout the Western Canadian Sedimentary Basin. Penn West’s estimated production for 2008 is in the range of 195-205 thousands of barrels of oil equivalent per day, of which just under half was natural gas.
Penn West is an actively managed trust with a large and diversified asset portfolio, experienced and specialized technical teams, and an extensive inventory of internal opportunities.
Penn West has considerable interests in large light/medium oil pools, an extensive oil sands project under early stages of development, and a large inventory of enhanced oil recovery opportunities. The Trust conducts a substantial capital program funded by retaining a proportion of cash flow. Additionally, Penn West’s extensive undeveloped land inventory of approximately 4.1 million net acres creates a source of additional value through land monetization, farm-outs and exploration joint ventures.
Three reason's why I like PWE:
1. 13% Dividend yield.
2. Hedge against rising oil and gas prices
3. Hedge against a weak US Dollar for US investors.
I plan to keep PWE as a long term investment as long as oil stays above $90 a barrel and natural gas above $8 per million BTU.
What is your favorite Canadian dividend stock?
Disclosure: The Div Guy is long PWE at the time of this post.
Favorite Canadian Dividend Stock: PWE
Posted by The Div Guy | Thursday, July 31, 2008 | dividend stock, stock, stock holdings | 6 comments »
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I like Husky Energy (HSE): nice dividend growth and great management.
I disagree that PWE is diversified. It belongs to energy sector and it is dependent on oil and gas prices. And it needs to be watched closely as the Canadian Income Trusts' positive tax treatment ends in 2011.
POL,
I like the nice dividend increases by HSE. I wish it traded on the US market.
Styrlicas,
Diverisified was in relation to an energy company since they have both oil and gas.
I am not worried about the change in tax treatment. The stocks dropped around 15% after the anouncement of the the tax change. I believe the tax change is reflected in the current pricing. That said you may have a little drop in 2011 but everyone buying the Canadian Truts knows about the tax law changes.
DG,
My concern with canadian income trusts is not that everyone knows about it.. But that noone knows what exactly will happen to the trusts and their distributions..
What happens if on 1/1/2011 these trusts start paying out distributions that yield 4-6% rather than the fat current yields?
For US investors, even if the trusts continue paying 10% annual yields, they'd end up with something like 6% annually after taxes, which is not bad of course.
DGI,
I think they will pay out a lower rate when the new tax rates take place in 2011. I am more concerned with the price of oil and gas above certain levels.
Penn West is technically not a dividend stock. It is an income trust and this really matters to Canadian investors. If you like Penn West, you should also look at Canadian Oil Sands (COS.UN) which in my opinion is a better long term hold due to more potential for distribution growth. After 2012 it will be interesting because these could all become high yielding dividend stocks.