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A Big Upgrade for Pengrowth Energy Trust

By Dave Mock - Updated Apr 5, 2017 at 7:57PM

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This bullish call comes from more than just one analyst.

Every day, the sun rises on Wall Street, and a plethora of professional analysts wakes to issue new opinions on stocks. Here at the Fool, we use our "This Just In" column to examine some of these picks -- and the track record of the company behind them -- so individuals can make better investing decisions.

In addition to following these professional banks, anyone can use Motley Fool CAPS to monitor the collective opinions of more than 125,000 members, many of whom demonstrate better investing insight than published analysts do.

More top-performing CAPS members are getting that bullish feeling for Pengrowth Energy Trust (NYSE:PGH) lately, enough to upgrade it from its long held four-star rank to a more formidable five stars. A total of 813 members have given their opinion on the oil and gas property owner, with many of them offering analysis and commentary explaining the recent optimism.

Energy investors have been whipsawed in the past year -- going from big gains in  companies such as Chesapeake (NYSE:CHK) and XTO (NYSE:XTO) early this year to a dramatic fall in commodity prices that has led many energy companies, including Suncor Energy (NYSE:SU) and Canadian Natural Resources (NYSE:CNQ), to dramatically slow operations.

As nearly all energy-related stocks have faced selling pressure over the past several months, many investors are looking to the Canadian Royalty Trust sector for value in stocks such as Pengrowth, Harvest Energy Trust (NYSE:HTE), and Penn West Energy (NYSE:PWE). The attractiveness of Pengrowth and similar Canadian Royalty Trusts is the regular, sizable cash payouts it makes in exchange for Canadian government tax incentives.

And although Pengrowth reduced its monthly payout by 25% recently and the Canadian government has changed its tax policy toward the group, investors still have a couple of years of monthly distribution payments before the new tax changes take effect. If the company maintains its lowered distribution rate for 2009, that still equates to roughly a 22.5% return on money invested today.                   

With the company generating record cash flow from operations in its third quarter, many CAPS investors remain bullish, with 96% of those rating Pengrowth Energy Trust expecting it to outperform the market.

To see what the very best CAPS analysts are saying now about Pengrowth Energy Trust -- as well as other winning stocks they are picking -- head on over to CAPS and have a look.

More Foolishness:

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool’s own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

Fool contributor Dave Mock recently upgraded his standard definition lifestyle to HD. He owns no shares of companies mentioned here. Chesapeake Energy is an Inside Value pick. The Fool's disclosure policy won't play rock/paper/scissors, for obvious reasons.

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Stocks Mentioned

Suncor Energy Inc. Stock Quote
Suncor Energy Inc.
$30.39 (0.36%) $0.11
Chesapeake Energy Corporation Stock Quote
Chesapeake Energy Corporation
Canadian Natural Resources Limited Stock Quote
Canadian Natural Resources Limited
$52.49 (0.94%) $0.49
XTO Energy Inc. Stock Quote
XTO Energy Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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