Permianville Royalty Trust: Do Not Expect A Distribution Anytime Soon

2025-04-15 05:34:50 ET

Summary

• Permianville Royalty Trust has suspended distributions due to high operating costs, underperforming the S&P 500 and energy sector ETF.
• The trust's revenues have been insufficient to cover costs since November.
• OPEC's production increase and U.S. tariffs have worsened the oil market outlook, making a near-term recovery in the distributions of PVL unlikely.
• Despite a potential long-term recovery in oil prices, PVL is rated as a hold for patient investors willing to endure the current downturn.

About two years ago, I analyzed the risks of Permianville Royalty Trust ( PVL ), namely its proven vulnerability to downtrends in the prices of oil and gas and its poor record of distributions, which have been suspended more often than those of other oil and gas trusts, such as Sabine Royalty Trust ( SBR ) and Cross Timbers Royalty Trust ( CRT ). Since that article, the stock has vastly underperformed the S&P 500 and the Energy Select Sector SPDR Fund ETF ( XLE ), as the stock has offered a total return of -31% whereas the S&P 500 has rallied 36% and the ETF of the energy sector has remained essentially flat (including its dividends)....

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