Enerplus looks past 2011

Article Excerpt

ENERPLUS RESOURCES FUND $24.10 (Toronto symbol ERF.UN; Units outstanding: 177.1 million; Market cap: $4.3 billion; SI Rating: Extra Risk; Dividend yield: 9.0%) is one of North America’s largest oil and gas trusts. Its production is 59% natural gas and 41% oil. In the three months ended December 31, 2009, lower oil and gas prices pushed down revenue by 20.3%, to $333.2 million from $418.3 million. Cash flow per unit fell 31.4%, to $1.07 from $1.56. Enerplus units yield 9.0%. The fund now plans to convert to a dividend-paying corporation in January 2011. However, it pays out only around 55% of its cash flow as distributions. It also has over $2.5 billion in tax losses. These strengths should let Enerplus meet its goal of continuing to pay dividends at the current rate. The fund’s 2010 cash flow is forecast at $4.25 a share. It trades at 5.7 times that estimate. Enerplus Resources Fund is a buy. buy…

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