Oil prices have languished this year, as WTI crude sits near $60 per barrel in the United States. However, oil prices could spike moving forward. Due to continued production cuts of OPEC as well as the ongoing war in Ukraine, combined with interest rate cuts, the price of oil could rise in the months ahead.
Investors looking for exposure to the oil sector could consider royalty trusts.
Royalty trusts are volatile and their dividend payouts depend largely on the price of oil. Therefore, these securities have higher risk than most stocks.
But given the high dividend yields and monthly dividend payouts of , and , it is only natural to wonder whether it is the right time to purchase these stocks.
1. Sabine Royalty Trust (SBR)
Sabine Royalty Trust is an oil and gas trust set up in 1983 by Sabine Corporation. At initiation, the trust had an expected reserve life of 9 to 10 years; the current estimated life of the trust is 8 to 10 years. The trust consists of royalty and mineral interests in producing properties and proved oil and gas properties in Florida, Louisiana, Mississippi, New Mexico, Oklahoma, and Texas.
It is roughly 2/3 oil and 1/3 gas in terms of revenues. The trust’s assets are static in that no further properties can be added. The trust has no operations but is merely a pass-through vehicle for royalties.
In early August, SBR reported (8/8/25) financial results for the second quarter of fiscal 2025. Production of oil and gas decreased -30% and -21%, respectively, over the prior year’s quarter. In addition, the average realized price of oil decreased -13%. As a result, distributable cash flow per unit declined -12%.
Based on its distributions in the first eight months of the year, SBR is offering an annualized distribution yield of 7.6%
The trust has generated an average annual distributable cash flow of $3.92 per unit over the last decade. However, the cash flows of SBR are extremely sensitive to the gyrations of the prices of oil and gas and hence they have resulted in a markedly volatile performance record.
2. Cross Timbers Royalty Trust (CRT)
is an oil and gas trust, set up in 1991 by XTO Energy. It is a combination trust: unit holders have a 90% net profit interest in producing properties in Texas, Oklahoma, and New Mexico; and a 75% net profit interest in working interest properties in Texas and Oklahoma.
A working interest property is one where the unit holder shares in production expense and development cost. This means that should development costs exceed profits no further profits will be paid from these properties until excess costs have been recovered. In 2024, oil comprised 72% of total revenues while gas comprised 28% of total revenues.
The trust’s assets are static in that no further properties can be added. The trust has no operations but is merely a pass through vehicle for the royalties. CRT had royalty income of $12.3 million in 2023 and $6.6 million in 2024.
In mid-August, CRT reported (8/13/25) results for the second quarter of fiscal 2025. Oil and gas volumes declined -18% and 35%, respectively, over the prior year’s quarter. The average realized price of oil decreased -14%. As a result, distributable cash flow (DCF) per unit decreased -17%.
Based on its distributions in the first eight months of the year, CRT is offering an annualized yield of 8.4%.
3. PermRock Royalty Trust (PRT)
PermRock Royalty Trust (PRT) is a trust formed in November 2017 by Boaz Energy, a company that is focused on the acquisition, development and operation of oil and natural gas properties in the Permian Basin. The trust derives all its cash flows from profits from the sale of oil and natural gas production from these properties and distributes dividends monthly. The stock went public in May 2018.
The Permian Basin is the most prolific oil producing area in the U.S. The properties of PermRock consist of long-life reserves in mature, conventional oil fields, with shallow, predictable decline rates. The trust can pump additional oil via water-flooding techniques, while it can also identify new reserves in the area in the upcoming years. On March 31, 2025, Boaz Energy completed the sale of the oil and gas properties underlying the Trust to T2S Permian Acquisition II LLC.
On August 13th, 2025, PermRock Royalty reported second quarter 2025 results for the period ending June 30, 2025. Net profits income received by the trust was $1.55 million, compared to $1.66 million in the prior year quarter. The average realized sale price of oil declined by 16% year-over-year, while natural gas edged up by 8.7%.
Distributable income for the trust came to $1.20 million, down 11% from $1.35 million in the prior year period and distributable income per unit of $0.10 was short a penny from $0.11 in the prior year. Total cash reserves as of June 30th, 2025, were $1 million, identical to June 30th, 2024. Year-to-date, the trust has declared $0.3105 in distributions.
PRT currently yields 9.5%.
Get the full list of Highest Yielding Royalty Trusts For 2025 here
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Disclosure: No positions in any stocks mentioned
