Pioneer Southwest Energy Ptrs (PSE) 2013 Review

Pioneer Southwest Energy Ptrs LP owns and acquires oil and gas assets in New Mexico and off shore Texas. PSE was formed in 2008.  Since then it has grown profits per share from $2.02 to $2.24 and its dividend per share from $.81 to $2.04 while earning a 30-50% return on equity.

(1) a huge inventory of drilling opportunities,

(2) solid growth in production.

Negatives:

(1) its exposure to natural gas,

(2) fluctuations in energy prices,

(3) unsuccessful drilling and cost overruns.

PSE is rated B++ by Value Line, carries a 20% debt to equity ratio and its stock yields 7.8%.

       Statistical Summary

               Stock      Dividend         Payout      # Increases  

              Yield      Growth Rate     Ratio       Since 2008

PSE           7.8%         2%              55%             2

Ind Ave      1.3            8                 15               NA 

                Debt/                       EPS Down       Net        Value Line

             Equity           ROE      Since 2001      Margin       Rating

PSE           20%           54%             1              58%           B++

Ind Ave      43              14             NA              18             NA

    Chart

            Note: PSE stock made good progress off its March 2009 low, quickly surpassing the downtrend off its June 2008 high (straight red line) and the November 2008 trading high (green line).  Long term the stock is in a trading range (blue lines).  The wiggly red line is the 50 day moving average.  The High Yield Portfolio owns a 50% position in PSE.  It is currently on the High Yield Buy List.  The lower boundary of its Sell Half Range is $33.

http://finance.yahoo.com/q?s=PSE

01/13