Friday, December 26, 2014

Permian Basin Royalty Trust: A Trust With Both Upside And Risk - Permian Basin Royalty Trust (NYSE:PBT) | Seeking Alpha

Permian Basin Royalty Trust: A Trust With Both Upside And Risk - Permian Basin Royalty Trust (NYSE:PBT) | Seeking Alpha



This is a very good article on the Permian Basin Royalty Trust.  I have owned PBT in the past, and I am thinking about buying it again while oil prices are low.  There is possible upside in the stock price and the dividend when oil prices rebound.  However, as the author mentioned, we can never expect oil prices to be very high again in the future because too much supply is available. 



The question is how much can you gain from PBT in the next year versus the S&P 500?  It is true that the economy is doing well, but the S&P already has a high PE.  Thus, I don't expect the S&P to gain more than 10% in the next 12 months, and a lot of volatility will be involved with it due to possible rising interest rates.  Therefore, PBT might be able to beat the S&P this next year.  I believe the company has an upside of close to 20% counting both the stock price and the dividend.  In fact, I am going to buy PBT right now because I am fairly certain about this scenario.


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