Monday, May 17, 2010

Precision Drilling Trust (NYSE:PDS), Penn West Energy (NYSE: PWE), Changing Converting Trust Model to Growth Stock Model

New Canadian laws are causing Canadian trusts like Precision Drilling Trust (NYSE:PDS) and Penn West Energy (NYSE:PWE) to change their models, moving from the high dividends offered to a growth stock model.

Canadian trusts were created for the purpose of paying out strong dividends in return for the favorable tax treatment they receive.

Now that the dividend yields will plummet, keep in mind you'll need to change to other investment vehicles as a result.

Penn West Energy is scheduled to convert sometime in 2011 or 2012, but check out whatever trusts you may be in to be sure to make the needed changes in respect to your investment goals.

No comments: