MetaTrends Profit

How to calculate RAY for O&G Trusts

Yahoo! CWEI:

Yield*(1-PayoutRatio)*100

I do this for pre-tax and post-tax yeild so I can try to choose better which trusts should go in a regular versus retirment account (because different trusts payout varying amount of distributions that are Return of Capital rather than Return ON Capital).

Remember that Trusts only officially report last Q's payout ratio (POR). You can choose to use just last Q's POR or the average over the last 4 Qs, or you can use the guidance provided by the trust or analysts and use the projected POR for the current Q or current year.

Once I do the calculation (my spreadsheet really) I check to see whether the ones that rate highly have good recent trends in production per unit, reserves per unit, etc. so I can pick ones that appear safe but also competant. Sometimes I buy ones that are less safe if I am pretty convinced that they are going to show some significant improvement. This of course is riskier.
Hope this helps. "

posted by agrossfarm @ 8:01 AM