I found this while going through high div stocks. They are making money and paying very good div though price is higher than book value. Any thoughts about price being so low and keep falling from the day they went public.
If this oil & gas definitely this should be a good stock right
This is a trust with it expiring in 2021. There are something like 32 or 33 payments left though. It is only a certain % of oil and then gas but if it kept the current div of .73 it should be worth over $20 while its sister trust is very overpriced right now expiring in less than 2 years. Whx should only be about $3.
I'm also considering buying this TRUST. It is important to understand this is not a STOCK. With a constant price in oil and gas, the value of the trust shares drops with each dividend payment until the trust expires. Look at WHX to get an idea of what to expect. The 20% divi is a little misleading. You have to account for the depreciation of the trust units as production eats into the total production over the life of the trust.
You are right in that the commodity, in this case oil with a percentage of gas, will deplete as more is produce over time. On the other hand, the value of what is in the hole will vary with the daily price. For 2/3 of the life of a USRT the price of the oil or gas will negate the production volume. In 2009 the average price of WTI was in the high $71, 2010 was around $93, 2011 was high $95, 2012 was high $92. So far this year it is mid $98. So yes the worth of what is in the hole goes down but not necessarily. That is the guessing that represent a USRT.