Monday, June 21, 2010
John Heinzl's excellent article on income trusts
He describes the conversion process in the following statement: "As an income trust, a business can distribute its earnings to shareholders and thereby pay no tax. Concerned by what it described as tax leakage, the federal government announced that trusts would have to start paying taxes in 2011 (real estate investment trusts meeting certain conditions were excluded)."
He goes on to state: "Income trusts as we know them will largely be gone by the time a new trust tax kicks in next year. In their place will be a new category of stock that in some cases will be more attractive to some investors than trusts were."
"I’m calling it the high-yielding corporation," said Harry Levant, the independent analyst behind the IncomeResearch.ca website. “It’s a new beast that has come out of the income trust process and demand for income."
"At their peak, there were about 265 income trusts listed on the Toronto Stock Exchange. Takeovers and privatizations will reduce the total number of high-yield corporations to around 90, in Mr. Levant’s estimation."
The full article can be found at: A new investment beast: the high-yield corporation page.
Great prices on Brand New business books!
It would be great to be able to look up the same for US equities, or even the 50 most common US stocks to see if they offer a discount as well.
The MoneyPaper and Stock1 links seem to have the most extensive lists of U.S. stocks.
I hope this helps.