Based on the IPO price, the trust's unitholders will receive distribution yields of about 5.6% for the year ending March 2014 and 6.1% for the following year.
Among the reasons that Adamo likes Plains is its 12.6% insider ownership, indicating that insiders have enough of a stake to make sure that unitholders are treated well.
Flaherty broke his Conservative Party's election promise not to impose any additional taxes on the trusts, which are able to pay out most of their earnings as dividends to unitholders without paying tax on the corporate level.
So it can buy royalty streams from coal mining companies (most collect royalties from reserves as well as mining their own coal) at five to seven times cash flow and still boost returns to its own unitholders.
Instead, the company is making a number of moves to boost shareholder value, among other things declaring an annual dividend of 50 cents a share, and opting to spin off its stake in its Covisint unit to holders following a pending IPO of that business.