ARC plans to convert

Article Excerpt

ARC ENERGY TRUST $22.27 (Toronto symbol AET.UN; Units outstanding: 249.9 million; Market cap: $5.6 billion; SI Rating: Speculative; Dividend yield: 5.4%) has confirmed that it plans to convert to a dividend-paying corporation on January 1, 2011. ARC will mail its conversion plans to its unitholders, and hold a meeting with unitholders, in December 2010. ARC plans to continue to pay its $0.10 monthly distribution, even after conversion. The units currently yield 5.4%. ARC has over $2.2 billion in tax losses that it can use to delay paying taxes. As well, it only pays out about 45% of its cash flow to its unitholders as distributions. That low payout ratio will help it maintain its distributions. ARC Energy Trust is still a buy. buy…

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