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MV Oil Trust Poised For Big Equity And Dividend Gains

Nov. 02, 2021 2:50 PM ETMV Oil Trust (MVO)CL1:COM10 Comments
M&T Research Group profile picture
M&T Research Group


  • Macro fundamentals in the oil & gas industry have pushed dividend yields from 10.7% to 17.36%.
  • Behavior of equity valuation mirrors oil price action such that the high achieved this year was used as support in 2018.
  • Bullish medium-to-long term oil and gas outlooks coupled with great dividend number suggest this investment vehicle is an excellent long play.

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The MV Oil Trust Fund (NYSE:MVO), based in Houston, TX, holds the net profits from mineral interests of approximately 800 oil and gas wells located in Kansas and Colorado owned by MV Partners, LLC, based in Kansas.

This article was written by

M&T Research Group profile picture
M&T Research Group is a collaboration between Heidi Tait, a Stock Options, Futures, and Forex trader, and Daniel Michael, a Petroleum Engineer interested in oil & gas market mechanics and money flow. We focus on sharing actionable trades and plays in our areas of interest while collaboratively writing about key economic events and developments, commodities and E&P stocks and derivatives, and options plays.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (10)

The Troll under the Pipeline profile picture
well, yeah this was a pump piece because anyone who trades the oil trust using technical indicators deserves to have their lunch money stolen...

But MVO is actually worth looking at. Payment was baked at the end of November due to how income timing works. Could see as high as 40 cents for Q4. Its worth noting thats despite Q4 being one of the higher operating cost quarters as various taxes ect hit then. A spring to summer oil rally could boost MVO's payments substantially higher.
PianoCat profile picture
MVO expires in 2026 so there’s no “long term” whatsoever. This looks like a pump piece.
Patrick Irish profile picture
This isn't an ETF, its an oil trust. It also expires on June 30th, 2026. To mess up one of those and not list the most important fact tells me how little the author knows about this trust.

Over 90% of this article was gobbly-gook, lots of talk with no substance, numbers with no context. Know what doesn't matter? ROE, stock market return, O&G return, PS, tri-peak fractal pattern, debt:equity, Simply Wall Street rankings, average payout of dividend stocks, dividends covered by earnings, RSI indicator, MACD indicator, 96 bar (or any other number) time frame.

The only thing that matters is (Volume * price of oil) - expenses. Calculate that each year and adjust for a 5% decline rate in volume and discount the money by 5% until this trust expires. If you can't stomach the price of oil moving, hedge it out. Those 3 sentences are all you need to know here and if you can't figure that out before you hit the buy button you should move on.

For all the short term indicators, they mostly don't matter. Even if a technical buy or short looks good on the chart, if oil moves against you a few % after you place your trade and its the wrong direction you are likely to lose. And if you can guess the price of oil in the next week, you shouldn't be messing around in this.
@Patrick Irish Good to run into you again. It's been a long time. And thank you for saving me a more fulsome reply.

Full disclosure, I am short MVO, but will likely close out soon; it is more of a hedge for my long position in VOC. For anyone considering an investment in a oil, natural gas, iron ore, etc. trust, figure out exactly how it works and model it out. (can it drill new wells, when does it expire, who owns it, where it is located, is it hedged, which quarters do the big expenses typically come in, what are the relevant prices for the production months used in the next distribution, what is the typical difference in prices it receives to WTI or Henry Hub, where is it in its distribution cycle, is it a monthly or quarterly payer, etc.) Take a look at the charts for MSB and NRT. These things can turn on a dime; it helps to know in advance what would be impactful news. Not a good idea to buy and hold, but money can be made. Sorry to preach. Good luck to all!
@Patrick Irish Thank you, sir. The author is so completely clueless it's embarrassing. He doesn't even know this is a trust, a very rare trust with a termination date. Does he really think MVO will pay well in excess of $9 in dividends before June 2026? It won't.
Patrick Irish profile picture
@Safari9 And your added details help people figure out 99% of the puzzle here. Btw, the short isn't bad from a fundamental thing but the borrow rate I'm seeing is 37% so I would try to find other things to hedge against VOC. Perhaps even a PUT option on USO. If you go deep enough in the money, maybe VOC distribution pays the time premium and still gives you upside? Good luck.
Can this be held in a IRA ? K-1?
@65wildcat Yes, you can hold in your IRA; trusts don't issue K-1s.
@Safari9 - thank you
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