Utilities Hitting 52-Week Highs: What You Need to Know
COP completed the spinoff of its downstream businesses to its stockholders last month in the form of shares of Phillips 66 (PSX) . With the completion of this transaction, ConocoPhillips is now the world's largest independent exploration and production company, based on proved reserves and production of liquids and natural gas. The 12-month average price target set by analysts for COP is almost $65. That's 18% higher than its current price, and if this comes to pass and you add in the almost 5% dividend yield, it may be reasonable to anticipate a total-return of around 23%.
For diversification's sake, and if you like the idea of buying low while still earning a generous dividend, consider a resource-based royalty trust like Cross Timbers (CRT) .
With its current 7% yield (paid monthly) and trading close to the bottom of its 52-week range, CRT is worth looking at, especially when you consider that it has no debt and boasts a trailing-12-month Return on Assets of 74% and a magnificent 131% Return on Equity.
Cross Timbers Royalty Trust operates as an express trust in the United States. The company holds 90% net profits interests in various royalty and overriding royalty interest properties in Texas, Oklahoma and New Mexico.
It also holds 11.11% nonparticipating royalty interests in nonproducing properties located primarily in Texas and Oklahoma; and 75% net profits working interests in seven oil-producing properties, including four properties in Texas and three properties in Oklahoma. CRT was founded in 1991 and is based in Dallas, TX.
At the time publication, Courtenay was long COP.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.