Monthly Dividend Stock In Focus: Permianville Royalty Trust

Updated on April 15th, 2025 by Nathan Parsh

Income investors looking to buy oil and gas stocks may want to gain exposure to the Permian and Haynesville Basins. Permianville Royalty Trust (PVL) is an oil and gas producer with properties in these two oil and gas-producing areas.

The trust also pays a monthly dividend. There are 76 monthly dividend stocks. You can see the full list of monthly dividend stocks (plus important financial metrics such as payout ratios and dividend yields) by clicking on the link below:

The coronavirus crisis severely damaged Permianville. In 2020, the pandemic caused the oil price to collapse, so Permianville suspended its dividend for 13 consecutive months, from mid-2020 to mid-2021.

Fortunately for the trust, oil and gas prices recovered strongly from the pandemic in 2021 thanks to the massive distribution of vaccines and the immense fiscal stimulus packages offered by most governments. As a result, Permianville reinstated its dividend in August 2021 and thus returned to the group of monthly dividend stocks.

Even better for the trust, oil and gas prices rallied to a 13-year high in 2023 thanks to the strict sanctions imposed by Western countries on Russia for its invasion of Ukraine. As a result, Permianville achieved an 8-year high distributable cash flow per unit in 2023.

The trust had suspended its dividend in 2025 until it declared a special dividend of $0.0085 for April.

Therefore, investors should remember that oil and gas royalty trusts are especially risky, and only investors with a high-risk tolerance should consider purchasing Permianville.

Business Overview

Permianville Royalty Trust is a statutory trust formed in 2011 to own a net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from properties in Texas, Louisiana, and New Mexico, as well as the Permian and Haynesville basins.

The trust can receive 80% of the net profits from selling oil and natural gas production from its properties. After all obligations and expenses are paid, unitholders receive the remaining proceeds each month. The trust is not subject to any preset termination provisions.

However, the trust could dissolve if at least 75% of outstanding units vote in favor of dissolution, or the annual cash proceeds received by the trust are less than $2 million for each of any two consecutive years.

Permianville came under great pressure in 2020 due to the coronavirus crisis. Fortunately, the trust, along with the broader energy market, recovered strongly from the pandemic in 2021.

Thanks to the sanctions imposed by the U.S. and Europe on Russia for its invasion of Ukraine, the global oil and gas markets became extremely tight last year. Before the sanctions, Russia produced about 10% of global oil output and one-third of the natural gas consumed in Europe. Due to the sanctions, oil and gas prices rallied to 13-year highs in 2022. This tailwind gave Permianville an 8-year high annual distribution of $0.44 in 2022. This distribution corresponds to a 10.6% yield at the current stock price.

On March 19th, 2025, PVL reported financial results for the fourth quarter of fiscal 2024. Thanks to new Permian wells, oil volumes grew 45%. Gas volumes grew 8%, but were negatively impacted by low gas prices and excessive operating costs. As a result, there was no distributable income for March.

PVL suspended its distributions in the first half of 2024 before reinstating its dividend in August of last year. However, the trust has suspended payments to shareholders again due to the net profit shortfall.

We do project that PVL will distribute $0.03 to shareholders in total in 2025, equating to a 2.1% yield at current prices.

Growth Prospects

Royalty trusts are designed as income vehicles for unitholders. However, since these companies operate in the energy industry’s production segment, they are extremely reliant on the price of the underlying commodity.

Therefore, while higher energy prices will lead to higher royalty payments and a rising share price, the opposite occurs when commodity prices decline. Lower energy prices lead to lower dividend payments and a dropping share price for royalty trusts.

Distributions are based on the price of natural gas and crude oil, and when the cost of either declines, Permianville is impacted in two ways.

First, distributable income from royalties is reduced, lowering dividend payments. In addition, plans for exploration and development may be delayed or canceled, which could lead to future dividend cuts.

Permianville currently enjoys a favorable business environment thanks to Western countries’ sanctions on Russia and OPEC’s tight production quotas. However, it is prudent to expect oil and gas prices, infamous for their dramatic cycles, to deflate in the long run.

Due to the global energy crisis caused by the war in Ukraine, a record number of renewable energy projects are currently under development. When all these projects come online, they will probably take their toll on oil and gas prices. In such a case, Permianville is likely to have significant downside risk.

Dividend Analysis

Permianville has suspended its distribution in July 2020 due to the coronavirus pandemic, which had an extremely negative impact on the prices of oil and gas. Commodity prices plunged in 2020, leading many oil and gas royalty trusts to suspend their payouts.

Most royalty trusts, such as Permian Basin Royalty Trust and Sabine Royalty Trust, resumed paying dividends after a few months. However, Permianville suspended its dividend for 13 consecutive months, the longest absence of dividend payments among the well-known oil and gas trusts.

With prices falling, Permianville is currently offering a much lower yield than it typically does, which makes holding the name less attractive due to the increased risks regarding its business. Our expected yield of 2.1% is barely above the average yield of the S&P 500 Index.

Overall, the trust is ideal for those who are confident in higher future oil prices and want to gain exposure to the oil boom in the Permian and Haynesville basins. The trust is much more leveraged to the price of oil than the integrated oil companies, and hence it has much more upside in the positive scenario (higher oil and gas prices) and much more downside in the event of a downturn in the energy sector.

On the other hand, like the other oil and gas royalty trusts, Permianville will have excessive downside risk whenever oil and gas prices enter their next downcycle. The trust will reduce or suspend its dividends while its stock price comes under great pressure. It is thus suitable only for risk-loving investors who are confident in excessive oil and gas prices in the future.

Final Thoughts

Royalty trusts like Permianville have faced a number of challenges in the past few years, including the weak oil price environment and the coronavirus pandemic, which suppressed global oil demand. That said, Permianville operates in the most prolific oil-producing area in the U.S., the Permian and Haynesville basins. It also thrives when oil and gas prices are elevated, such as when Western countries placed sanctions on Russia.

The current business environment doesn’t appear favorable for Permianville, and another downturn in the energy sector is expected to show up in the upcoming years due to the cyclical nature of the oil and gas industry and the record number of clean energy projects that are under development right now. Due to the non-diversified business model of the trust and its dramatic reliance on the price of oil and gas, investors should not allocate a great portion of their portfolio to this stock.

Moreover, the trust’s short history leaves much to be desired for investors seeking reasonable levels of dividend safety and consistency.

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