Its Dividend Day (DIVY)

[rrufff]

The pressure, to which I referred, is that with oil prices and energy at all time prices, this one has done well, but not in comparison to other energy sectors. I've been playing coal micros and they have suddenly caught up. I'm still waiting for a couple of oil and gas micros to catch up with the market. So, my motivation is to discover underpriced securities and this led me to this board.

I was interested because of the relative lag and decided to start doing some research into why yield is so high and price not much higher than it is. There is always an explanation and every stock has positive and negatives. I only wished to get the details of both positive and negative from long time posters here.

What I've come up with so far is largely from this article, and I hoped that others had better, or perhaps more current, insights

http://investorshub.advfn.com/boards/read_msg.asp?message_id=29171971

http://www.dividenddetective.com/canadian_royalty_trusts.htm

The high or low lights, so far, are the following:

1. Tax changes create uncertainty, scaring away investors, who could wind up with perhaps negative yields, if they are the last ones standing.

2. The article, and other sources, indicate that investors may be safe until 2011, but that there have been rumblings of changing the law sooner.

3. All that together, in essence, enhances uncertainty, as investors want to get out BEFORE there is a change. This puts pressure on the price. The fact that the stock has done well does not mean this is not true. There is a price to pay, and this is true throughout all sectors of the market.

4. The tax changes could hurt many trusts well before 2011. Every drop of oil or natural gas pumped out of the ground reduces a trust's reserves by that amount. Historically, the trusts compensated by adding to reserves via acquisitions, using their shares as currency. Now, given their uncertain outlook, it will be harder to make new acquisitions. Trusts without sufficient reserves in the ground may be unable to maintain their current distribution levels.

5. The article indicates that yields will tank perhaps to as low as 2%. At some point, there will be a rush to the exits. The real issue seems to be timing, and whether an individual investor takes on the risk of being able to get out before others.

6. Has the company discussed timing here? Is there a risk of a surprise announcement which could cut a large percentage of the price over night? E.g., could they announce a pending change in structure in anticipation or could they announce a large purchase even though prices are high in anticipation of change of structure?

7. As the article suggests, is there a risk that the company needs to raise funds to continue its competitive payout to attract investors? What would happen if they suddenly announced a large stock offering or a private placement or other financing to shore up reserves?

8. Has there been other discussions with respect to the theoretical risk of UNLIMITED LIABILITY to shareholders? Although this seems to be largely theoretical so far, the articles indicate that shareholders here could be sued in the event of liability, just as a partner in a partnership, could be sued. Again, although this is a low risk, would someone invest if he thought he could be exposed to US or Canadian securities laws issues, contract issues, leashold controversies, tax or regulatory controversies? Although the risk is low, the theoretical risks could be in the millions of dollars and partnership laws typically allow creditors to go after a choice of individuals for 100% liability and not necessarily pro rata. Plaintiffs typically jump first at the biggest pockets, obviously. In any event, legal fees, if the worst situation happens, are enough to bankrupt most individuals.

I was hoping to find some discussion of these very serious issues here in anticipation of making any investment decision.

Thanks again.