As the market has slaughtered the Income Trust sector over the past couple of weeks we think that there will soon be a buying opportunity. As explained in an article posted a few days ago, the income trust sector, which currently has no corporate tax, will be slapped with a corporate tax in 4 years time. Our question is, if the tax going to start in 4 years time, then why is the market selling off right now? We believe that the market has over reacted thus creating a buying opportunity for Energy Trusts. Even some of the reliable energy trusts are now paying out 12-20% in dividends due to the recent sell off. Has the market bottomed out yet? We don’t know, but it doesn’t take a genius to figure out that a 12%-20%/annum return is alright! Moneysense Magazine has an income trust review that details the strongest trusts in terms of reliability, value and yield. Here are some of their overall best Energy Trust picks:
Income Trust Symbol Current Yield Daylight Energy Trust DAY.UN 23.1% Inter Pipeline Fund IPL.UN 10.29% Peak Energy Services Trust PES.UN 17.88% PrimeWest Energy Trust PWI.UN 15.48% Progress Energy Trust PGX.UN 14.6%
Those picks are well and good but we also like the following due to it’s low payout relative to earnings and cashflow.
| Income Trust | Symbol | Current Yield |
| Arc Energy Trust | AET.UN | 11.59% |
| Canadian Oil Sands Trust | COS.UN | 4.13% |
So what do you guys think? Has the Energy Trust sector bottomed out? Is it time to buy? Feel free to post your opinions!
Please note that the Income Trusts that we mention in this article are NOT recommendations and we do own some of the stocks listed. Please do your own due diligence and consult a financial professional before making any decisions.
Building your Networth… The Stingy Way.
