$9-10/share would be quite a jump. Even if their cashflow from Barnett Shale doubles, it would add another $2, which means a jump to $7-8. Nobody can predict the interest rates and what would be assumed as a good multiple in a few years.
I'm as bullish as anybody, but I don't think you will see a 4 percent yeild in 2010. I do expect $8 in dividends. I think a five percent yeild is likely giving you a share price of $160. I think in 2010 interest rates will be higher and growth prospects will be lower with a company twice as large, resulting in a lower yeild. Still its is a no brainer here to me, and I would be buying if it were not already such a large position.
The tax, which they are not paying now, but they will be paying in 2008 at a rate of 24% will be eating up a lot of the cashflow increases. I wish they would have taken a page out of Kaneb's book and had converted to an LLC.
I am looking to buy more shares, but there are a couple of unknowns right now: (1) the price of the new shares they will be issuing and (2) the next Yorktown distribution, which should be some time in the next 30 days. That tends to have an overwhelming effect on the stock and with the recent run-up, who knows what it will be.