Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, oil and gas royalty trust Whiting USA Trust II (NYS: WHZ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Whiting USA's business and see what CAPS investors are saying about the stock right now.
Whiting USA facts
Austin, Texas (2011)
Independent oil and gas
Trailing-12-Month Net Income
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 96% of the 23 members who have rated Whiting USA believe the stock will outperform the S&P 500 going forward.
This is a recent IPO trust with a possible 16% yield to start. I have followed a few of these trusts that are set up for a set number of years, or a set production. This is common on oil/NG and some natural resources. Since little money is put in to expand or maintain the output, they generally have declining production and a declining dividend.
Jim Royal pointed this one out in this Fool article.
These type of trusts often end up extremely overvalued in later years. ... As Jim points out, it is not a long term buy/hold/forget proposition. ...
Don't fall for this type of trust at a high premium in its later years. In the early stages, these appear to hold up. Once the dividend gets "printed" on stock ticker data, it could see a boost above its IPO price.
If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong five-star rating, Whiting USA may not be your top choice.
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.