Tax credits will help maintain its payout

Article Excerpt

PENGROWTH ENERGY TRUST $11 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 290.8 million; Market cap: $3.2 billion; Price-to-sales ratio: 2.2; Dividend yield: 7.6%; SI Rating: Average) plans to convert to a corporation before the end of 2010. However, the trust has $2.8 billion of tax credits it can use to offset the income taxes it will have to pay starting January 1, 2011. As a result, Pengrowth plans to maintain its annual payout of $0.84 a unit for several years. In the three months ended March 31, 2010, Pengrowth’s daily production fell 5.8%, to 6,806 barrels of oil equivalent (which includes natural gas) from 7,226 barrels a year earlier. However, its selling price per barrel rose 17.8%, to $52.49 from $44.57. As a result, Pengrowth earned $0.37 a unit in the latest quarter. That’s a big improvement over the $0.21 a unit it lost a year earlier. Cash flow per unit rose 37.8%, to $0.51 from $0.37. Pengrowth is a..

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