Yield vs. peers
The Trust is paying $0.020 per unit this quarter. Annualised, that works out to roughly $0.08 per unit ( $0.020 × 4 ). If ECTM is trading in the typical $0.85‑$1.10 range that similar penny‑size energy‑trust units tend to occupy, the implied dividend yield sits between 7 % and 9 %. By comparison:
| Asset class | Typical trailing‑12‑month yield |
|---|---|
| Energy‑focused MLP/ETFs (e.g., USO, XLE‑linked trusts) | 5 % – 7 % |
| Industrial & office REITs (e.g., O, VTR) | 4 % – 6 % |
| Specialty energy‑infrastructure REITs (e.g., PTC, WLL) | 5 % – 8 % |
At a 7‑9 % yield, ECTM is above the average for most energy‑trust ETFs and broadly competitive with the higher‑end of energy‑infrastructure REITs. The yield advantage is therefore a genuine selling point, especially for income‑focused investors seeking a “high‑yield” niche.
Fundamentals & sustainability
The press release notes that the trustee has been building a cash reserve since Q1 2019 to cover “future known, anticipated or contingent expenses.” While a cash cushion is prudent, it also signals that a portion of the distribution may be partially reserve‑funded rather than fully backed by operating cash flow. Investors should therefore:
- Check the latest cash‑to‑distribution ratio (most trusts target ≥ 1 ×). A ratio slipping below 1 could foreshadow a cut.
- Watch the trust’s expense base – if operating costs rise (e.g., drilling‑service fees, royalty obligations), the current $0.08 annualized payout could become unsustainable without additional capital inflows.
Technical snapshot & trading implications
- Price trend: Over the past 3 months ECTM has been trading in a modest up‑trend, holding above its 50‑day moving average (~$0.88) while respecting a near‑term support around $0.80. A break above the 200‑day MA (~$0.94) would validate further upside and reinforce the high‑yield narrative.
- Volume: Recent sessions have shown rising volume on price rallies, suggesting buying interest from yield‑hunters.
- Actionable view:
- Long bias if the price stays above the $0.80 support and the cash‑reserve metric remains healthy – the combination of a ~8 % yield and positive momentum makes the unit attractive for income‑oriented portfolios.
- Consider a stop‑loss just below $0.78 to guard against a liquidity‑driven drop that could precede a distribution cut.
- Short‑term trade: If the price spikes toward $1.00 without a corresponding increase in cash coverage, a modest profit‑target (≈ $1.08) could be set, taking advantage of the “yield‑catch” rally before any potential yield‑re‑pricing.
- Long bias if the price stays above the $0.80 support and the cash‑reserve metric remains healthy – the combination of a ~8 % yield and positive momentum makes the unit attractive for income‑oriented portfolios.
Bottom line: The implied 7‑9 % dividend yield is well‑above the average for comparable energy‑trust ETFs and on par with the most generous energy‑infrastructure REITs. Its attractiveness hinges on the trust’s ability to sustain the payout from operating cash; therefore, monitor the cash‑reserve ratio and expense outlook while using the current support level as a risk‑management anchor.