Out at the peak

Friday, February 17, 2006

New CanRoy in town

CNE is now available on the NYSE. Current monthly payout is $0.20 USD.
I think this would be a nice buy @ $20/share. After 15% Canadian tax, the yield would be 10%+. The question is if it will dip to $20. As always, please do your due diligence (DD).

To recap, I like the following CanRoys:
AAV, FDG, PGH, PTF, PVX, and PWI. (Other people like HTE too.)


  • I've toyed around with the notion of getting into these trusts, but always end up going for cap gains instead of yield.

    Q: How is the tax on these different from foreign tax paid on a dividend-yielding stock from the same country (like my chunk of Goldcorp which gives me an extra item to fill out on the ol' 1040 every year)?

    By Blogger Contrary Guy, at 6:38 PM  

  • So with Canadian dividends, Canada withholds 15%. We then treat this as foreign tax credit. IRS allows you to claim this so you are not double taxed.

    More Info

    I should mention that trusts are actively managed to add resources, but always check to see how many years left they have in reserve. If they expend all resources, the trust might have to be liquidated and your principal could erode. Also the dividends are dependent on revenue and energy prices, so that could fluctuate.

    The only immediate risk I see with energy plays is that if we enter a recession, demand should drop. All indications I see stake oil at around $60/barrel for the rest of 2006 as a conservative estimate.

    I expect a huge spike to run oil up $80-$100/barrel because something will go wrong.

    I'm not always right, but I take the risk.

    By Blogger Out at the peak, at 1:50 AM  

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