Canadian Royalty Trusts pay out a high portion of their profits to shareholders as dividends. Out of the many royalty trusts that trade in the U.S. markets, five are listed below with their current dividend yields:
|S.No.||Fund Name||Ticker||Current Yield|
|1||Pengrowth Energy Trust||PGH||8.23%|
|2||Penn West Energy Trust||PWE||9.64%|
|3||Provident Energy Trust||PVX||10.24%|
|4||Enerplus Resources Fund||ERF||8.93%|
|5||Baytex Energy Trust||BTE||5.34%|
Though the Baytex Energy Trust currently offers a lower yield than others the yield is set to increase. From a news release yesterday:
Baytex is also pleased to announce that our Board of Directors has approved a distribution level of $0.18 per unit per month, an increase of 50% from the current level of $0.12 per unit per month. The $0.18 per unit distribution will commence with the distribution in respect of December 2009 operations, which will be payable on January 14, 2010 to unitholders of record on December 31, 2009.
Unlike American royalty trusts Canadian trusts can acquire additional properties when the inital ones run out of oil or gas or other natural resources they extract. Canadian trusts also do not pay corporate taxes as long as they pay out a high proportion of profits as dividends to trust unit holders. It must be noted however that this special tax treatment of trusts is set to end in 2011. The Canadian government will then start taxing them as regular corporations and remove the special tax advantages they enjoy now. As a result of this tax treatment change these trusts will not be able to offer such high yields in the future.