Hugely Discounted Income Trusts… Stedily Recovering Market… Time To Buy Up?
As the market has slaughtered the Canadian Income Trust sector over the past couple of weeks some excellent buying opportunities are starting to sneak up on us. Question on everyones mind is, if the Income Trust tax is going to start in 4 years time, why is the market selling off right now? Many people believe that the market has over reacted thus creating a buying opportunity for Energy Trusts.
Even some of the reliable energy trusts are now paying out 12-20% in dividends due to the recent sell off. Has the market bottomed out yet? It can’t be said for sure, but it doesn’t take a genius to figure out that a 12%-20%/annum return are much sweeter than bonds or value dropping U.S Stocks! Moneysense Magazine has an income trust review that details the strongest trusts in terms of reliability, value and yield. Here are some of their overall best Energy Trust picks:
Income Trust Symbol Current Yield
Daylight Energy Trust DAY.UN 23.1%
Inter Pipeline Fund IPL.UN 10.29%
Peak Energy Services Trust PES.UN 17.88%
PrimeWest Energy Trust PWI.UN 15.48%
Progress Energy Trust PGX.UN 14.6%
Those picks are well and good but the following due to their low payout relative to earnings and cashflow.
Income Trust Symbol Current Yield
Arc Energy Trust AET.UN 11.59%
Canadian Oil Sands Trust COS.UN 4.13%
What are your thoughts? Has the Energy Trust sector bottomed out? Is it time to buy? Feel free to post your opinions!
Please note that the Income Trusts that we mention in this article are NOT recommendations and we do own some of the stocks listed. Please do your own due diligence and consult a financial professional before making any decisions.
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Filed under: Canadian Income Trust, Finance, General, High Dividend Stocks, Income Trust, Income Trusts To Purchase, Stocks Tagged: General
Oil and gas trusts are already cutting distributions drastically. Comparing oil and gas trusts with pipelines are like comparing apples to oranges.