Whether they’re trusts or corporations, energy producers can only pay in dividends what they earn in cash flow. And that cash flow is determined by three factors: how much they produce; what it costs them to get it out of the ground; and the price that output fetches on the market. Read More

The ability to maintain distributions after converting to a corporation is the ultimate test of strength for a trust’s underlying business. Only the exceptional have thus far been able to accomplish the feat. Read More

Energy is Canada’s chief cash crop. But it’s far from the only natural resource the country has in abundance. At last count, Canada produced more than 60 different metals and minerals and operated more than 180 producing facilities, from peat bogs to quarries and steel mills. Read More

Like politics, everyone these days seems to have an opinion on energy: Where the price of oil is headed, what the government should or shouldn’t be doing about it, why dependence on Middle East Oil is good or bad, why global warming does/doesn’t matter, why renewable energy is good, you name it. As investors in Canadian oil and gas producer trusts and dividend-paying corporations, it’s critical that we don’t buy into all the bull. Read More

It would be nice to say that the catalyst for the recovery was that investors are finally waking up to extreme values and returning high-quality companies to proper valuations. As much as I like my favorite trusts, however, the real force behind this upward explosion is the one driving almost all global markets higher: growing investor optimism that we’re headed for at the least a U-shaped global recovery in coming months--and possibly a V. Read More

We don’t have all the information on how trusts will deal with 2011 yet. The good news is that we do know, beyond the shadow of a doubt, that good businesses will fare well no matter what happens on the trust tax front. Moreover, all of them are still pricing in a great deal of 2011 uncertainty and risk. That means little downside risk again no matter what happens, and a lot of upside as uncertainty is gradually reduced in coming months. Read More

Are we still best off sticking with positions in well-run Canadian trusts and dividend-paying corporations? Are we close enough to a turn and are values truly compelling enough to weather further potential pain, or are we better off dumping everything as staying in cash until there’s a real sign of a turn? Read More

Like open-end funds, closed-end funds hold portfolios of securities at the discretion of the manager. They do, however, differ in one key respect. Mainly, rather than mint shares when an investor wants to buy or cancel when there’s selling, closed-end funds trade a fixed number of shares on a major exchange. You never cash out or in. You buy and sell on the exchange just as you would a common stock or trust. Read More

Oil prices hit a low near USD33 a barrel last month, before rallying to close out 2008 around USD40. That capped an extraordinary year in which black gold surged from USD90 to nearly USD150 in the first half and then tumbled 70 percent-plus in the second. Read More

The possibility of further distribution cuts is well priced in for almost every energy and resource trust. There is a group of trusts, however, that’s almost equally beaten down but has far more revenue security--and therefore doesn’t face the risk of distribution cuts if the recession lasts longer than expected: Strong business trusts. Read More