High payout to continue

Article Excerpt

PENGROWTH ENERGY TRUST $12 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 289.8 million; Market cap: $3.5 billion; Price-to-sales ratio: 2.4; Dividend yield: 7.0%; SI Rating: Average) has proven oil and natural-gas reserves that should last 8.3 years at current production rates. However, it hopes to expand its reserves by doing more drilling on its existing fields in western Canada. That’s a slower route to growth than buying properties from others. But it takes less capital and avoids the risk of big losses when acquired properties fail to live up to expectations. Pengrowth earned $0.32 a unit (or a total of $84.9 million) in 2009. That’s down 79.7% from $1.58 a unit (or $395.9 million) in 2008. Cash flow per share fell 42.7%, to $2.09 from $3.65. These declines mainly reflect a 26.4% drop in oil and gas prices (on a combined basis). In response, Pengrowth cut its monthly distribution by 30.0%, to $0.07 a unit from $0.10, to free…

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