Two of the savviest advisors around are Mark Skousen and Richard Lehmann. Both are noted experts in income investing and both have recently issued buy recommendations for the same stock.

Skousen, in his High-Income Alert, and Lehmann, in his Forbes/Lehmann Income Securities Investor, both look at Penn West Energy Energy Trust (NYSE: PWE).

Skousen explains, "The dollar continues to slide. Oil is approaching $100 a barrel, and gold, a sign of global instability, now is above $800. And the mortgage credit market continues to soften.

"All of these conditions make it difficult to profit, even in our high dividend-paying stocks. Fortunately, history is on our side. Studies show that a well-diversified portfolio of dividend-paying stocks tend to be more stable during difficult times.

"Our safest position is in oil stocks, so we are going to add another oil & gas stock to our portfolio: Penn West Energy. The trust bought out Canetic recently to create the largest oil and gas trust in North America.

"The combined trust is worth more than $15 billion and has the equivalent production of more than 200,000 barrels of oil a day. Penn West holds interests in western Canadian oil and natural gas pools, along with opportunities in oil sands, coal-bed methane, shale gas, and enhanced oil recovery.

"Penn West is paying an incredible dividend that now is about 35 cents a month, compared to 30 cents a year ago. The company's current dividend yield exceeds 13%."

Continue reading Two picks for Penn West (PWE)

Two picks for Penn West (PWE) originally appeared on BloggingStocks on Fri, 23 Nov 2007 10:15:00 EST. Please see our terms for use of feeds.

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Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Penn West Energy Trust (NYSE: PWE) is a top conservative idea for 2007 from income expert Richard Lehmann, editor of The Forbes/Lehmann Income Securities Investor. He explains, "I am a steadfast believer in the Canadian oil and gas trusts, despite the Canadian government's decision, on October 31, 2006, to begin taxing the trusts as regular corporations after 2010.

"Currently, the trusts pay out income to investors as dividends and are not taxed on the corporate level. In addition, these dividends are treated as qualified dividend income for U.S. investors and subject to the preferential 15% tax rate.

"Recent proposed changes in the Canadian tax law slammed all trusts and brought PWE down from $37 to a current price of $31. This brings the yield up to almost 12%. I like Penn West because it is one of the largest trusts, with over nine years of proven reserves and extensive holdings of unproven ones.

"They have four years to restructure their finances to offset the increase in taxes -- something that may not even come about if past lobbying efforts are any indication.

"Given that the current dividend represents only 63% of cash flow, the monthly dividend is safe from cuts down to a $50 a barrel price for oil. Investors are likely to sell shares of Penn West to lock-in tax losses in December, but I see price appreciation early in 2007 as investors buy in for the irresistible yield."

Top Picks 2007: Lehmann still "trusts" Penn West Energy Trust originally appeared on BloggingStocks on Sun, 24 Dec 2006 14:30:00 EST. Please see our terms for use of feeds.