Tuesday, May 12, 2015

NRT with Stable and High Dividend Yields

North European Oil Royalty Trust (NRT) is a grantor trust which, on behalf of the owners of beneficial interest in the Trust, holds royalty rights covering gas and oil production in certain concessions or leases in the Federal Republic of Germany. The rights are held under contracts with local German exploration and development subsidiaries of ExxonMobil Corp. (ExxonMobil) and the Royal Dutch/Shell Group of Companies (full profile HERE). A royalty trust is a type of corporation, mostly in the United States or Canada, usually involved in oil and gas production or mining. However, unlike most corporations, its profits are not taxed at the corporate level provided a certain high percentage (e.g. 90%) of profits are distributed to shareholders as dividends. The dividends are then taxed as personal income.

NRT announced a quarterly distribution of $0.33 per unit for the second quarter of fiscal 2015, payable on May 27, 2015 to holders of record on May 15, 2015. This dividend works out to approximately 2.35%, so look for NRT to trade 2.35% lower when NRT shares open for trading on 5/13/15. $0.33 per unit is -5.7% decrease from prior dividend of $0.35, however it is a forward annual yield of about 9.50%. The above is the dividend history chart, showing historical dividends and can help in judging whether the most recent dividend from NRT is a reasonable expectation and likely to continue.