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4 High Yielding Oil Trusts To Avoid And 1 High Yield To Buy

Published Wed, 23 May 2012 02:49:29 -0400 on Seeking Alpha

Oil trust and partnerships are popular due to their popular high distribution yields. As Treasury Bond rates have decreased to record low yields, oil trusts pay up to 17% per year. There are, however, many risks associated with each trust or partnership. High yield income investors should be cognizant of these specific security risks. Chesapeake Midstream Partners, L.P. (CHKM) Chesapeake Midstream Partners is a midstream oil and natural gas partnership. The partnership earns revenues as clients use the company's oil gathering systems, and other midstream energy assets. Chesapeake Energy is the General Partner. This immediately draws my interest as Chesapeake Midstream Partners' SEC S1 has the following risk: I do not want to rely upon Chesapeake Energy's viability to decide the liability placed upon Chesapeake Midstream Partners' business operations. The risk, in my view, outweighs the rewards. Chesapeake Energy Corporation (CHK) spun off the partnership in an initial public offering.... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CHESAPEAKE GRANITE WASH TRUST 0.63   0.0 0.00 0.13 23.39
SANDRIDGE PERMIAN TRUST 1.59   3.8 0.42 0.36 22.39
SANDRIDGE MISSISSIPPIAN TRUST I 0.57   3.4 0.17 0.11 18.15


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