Zacks Industry Rank Analysis Highlights: B.P. Prudhoe Bay Trust, San Juan Basin, Exxon Mobil and Petrobras

Zacks Industry Rank Analysis is written by Dirk Van Dijk, CFA, Chief
Equity Strategist, Zacks.com.

This week: Some Improvements in Energy

A good example of an industry that is showing both a very good overall
rank and substantial improvement is Oil Royalty Trusts, which with a
industry rank of 2.00 is tied for 4th place with several other
industries. What sets it apart is that it improved 21 spots in its
ranking as the average ranking of its components, up from 2.43 last
week. Every one of the seven firms in the industry has a Zacks Rank of 2.

These are great vehicles for income-oriented investors, as they simply
represent big pools of oil or natural gas in the ground. As the oil is
produced, the proceeds are paid out in the form of dividends. It also
means that the dividends are very variable with the price of oil.

The problem with them is that eventually the oil in the ground will run
out, so some of that dividend is really a return of capital, not a
return on capital. Thus if you are thinking about investing in them,
look at how long those reserves will last, as well as the current income
you are getting from them.

On the plus side, the tax code recognizes this, so a portion of the
dividend is sheltered from the IRS. Unlike a regular exploration and
production oil firm, there is no risk of a dry hole, nor are they
exposed to changes in the price of drilling. If you think that the price
of oil is headed higher, they are very attractive investments,
especially if you want current income. Two of the larger names in the
area that are worth considering are B.P. Prudhoe Bay Trust (NYSE: BPT | Quote | Chart | News | PowerRating)
and San Juan Basin (NYSE: SJT).

A good example of a big important industry that is still distinctly
mediocre in terms of its absolute standing is the Integrated Oil
Industry, the home of some of the world's largest firms like Exxon
Mobil (NYSE: XOM | Quote | Chart | News | PowerRating)
and Petrobras (NYSE: PBR).
It currently has an average rank of 2.95, which puts it in 102nd place
out of 206 industries ranked. That, however, is a substantial
improvement from the 3.16 average last week, and was enough to lift it
by 49 spots.

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SOURCE: Zacks.com

Dirk Van Dijk, CFA 
Zacks.com 
Phone: 312-265-9211 
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For full details on Petroleo Brasileiro S.A. Petrobras ADS (PBR) PBR. Petroleo Brasileiro S.A. Petrobras ADS (PBR) has Short Term PowerRatings at TradingMarkets. Details on Petroleo Brasileiro S.A. Petrobras ADS (PBR) Short Term PowerRatings is available at This Link.

For full details on Exxon Mobil Corporation (XOM) XOM. Exxon Mobil Corporation (XOM) has Short Term PowerRatings at TradingMarkets. Details on Exxon Mobil Corporation (XOM) Short Term PowerRatings is available at This Link.

For full details on San Juan Basin Roy Tr (SJT) SJT. San Juan Basin Roy Tr (SJT) has Short Term PowerRatings at TradingMarkets. Details on San Juan Basin Roy Tr (SJT) Short Term PowerRatings is available at This Link.

For full details on BP Prudhoe Bay Royal Trust (BPT) BPT. BP Prudhoe Bay Royal Trust (BPT) has Short Term PowerRatings at TradingMarkets. Details on BP Prudhoe Bay Royal Trust (BPT) Short Term PowerRatings is available at This Link.