Today Provident Energy (PVX: chart, web, Y!) announced that the February cash distribution will remain at $0.12 USD per share payable on March 14th.

In addition, they announced the characterization of dividends for 2007 distributions as 97.58 percent qualified dividend and 2.42 percent tax deferred return of capital. The tax deferred portion is treated as an adjustment to the cost base of the shares.

This characterization is the last piece of information I need to finish up organizing my 2007 tax information.

It’s good to see the return of capital is so low. Fundamentally it means that the company has been able to fund nearly 98% of the distributions with free cash flow, something other funds like Cornerstone (CLM: Chart, Y!) can’t claim.

Investing, Taxes distribution characterization, Provident Energy, PVX, Taxes

I bought more Provident Energy (PVX: chart, web, Y!) today, adding another 50 shares to my holdings. Crude oil ($wtic: chart) spiked on the news that Benazir Bhutto was assassinated in Pakistan, and natural gas ($natgas: chart) is holding its own above $7 going into the cold weather season.

I’m playing the trend. I’m in the stock for the dividend, but if the price rises to $13 I’ll definitely take some off the table. 30% price appreciation is too much to pass up, especially when you see it coming. The fundamentals of the company remain intact, and the only other thing that is weighing on the canroys is increasing production costs and the lingering Canadian tax policy.

Investing, Oil & Gas, Royalty Trusts CANROYS, Provident Energy, PVX

My Provident Energy Trust (PVX: chart, web, Y!) has been on the slide since the beginning of November. I can’t figure out why.

The only conclusion I can come to is that it’s attributed to end of year tax selling, but that theory only makes marginal sense. After all, PVX is continuing its CDN$0.12 monthly dividend, and fundamentally, I don’t see why they’d drop the distribution any time soon. Crude oil ($wtic: chart) is still North of $90 per barrel, and natural gas ($natgas: chart) is holding above $7 per MCF.

So it’s tough to tell why the stock has dropped nearly 30% since its high of $13.55 back in the first part of November.

However, I extended the chart out a few years today, and noticed a pattern. The stock price has dropped significantly in between late October and late November nearly every year since the inception in 2002. To further exploit the pattern, over the past three years, the stock starts its way upward after the beginning of the year and peaks somewhere around July.

I’m not sure how I’m going to play this. I’ve held PVX for its healthy monthly dividend, and haven’t really considered trading it based on the chart. However, it would be tough to miss out on a 30% gain that I can see coming…

What do you think? Would you play this trend?

Investing, Market Trends, Oil & Gas, Royalty Trusts crude oil, dividends, Market Trends, natural gas, Provident Energy, PVX, royalty trust