Freehold Royalties Ltd (FRU.TO)

This is a much cheaper purchase of PrairieSky (PSK-T). This acquisition makes them about 84% royalty based. A low risk way to begin to add some energy weight back for him. Thinks it will get up to the low $20s. Yield of 6.08%.

He has started to add to oils and thought that the royalty was always a good way to get his feet wet. His company has a $20 target on this. Dividend yield of 6.02%.

Oil and gas royalty company. The attraction is the lower operating risk, but you are still exposed to the commodity price. It is a call on oil prices.

Pretty good yield even though they did cut their dividend along with everybody else. This is a royalty company, so they don’t have the big CapX programs that others do. A good mix of royalty projects and others. He likes the company.

An excellent quality company. Have taken on some new acquisitions that has really helped them to make sure that they have pushed back taxability of their cash flow for some time. She is generally very supportive of the royalty model. A great way to get exposure to oil/gas business. Very high margin business. This is a good, long term story and makes a lot of sense in the long-term.

Mostly a royalty company with about 33% of their production that they operate themselves. With royalty companies, you want to see more drilling on your land. This one is extremely well-managed. Used to own this, and with its fall in price he is taking a 2^nd look at it as well as PrairieSky Royalty (PSK-T). Both are good companies.

Stock vs. Stock. FRU-T or PSK-T. Both don’t take on operating risk. When inflation creeps up they don’t have to worry about it. FRU-T is not a bad company. He would prefer PSK-T right now because it is bigger and did not cut the dividend recently, like FRU-T.

The dividend was cut recently. He likes the stock. It has long term value and is a long term hold. As soon as we see improvement in the price of oil the dividend should be re-instated.

He likes that this has very little CapX exposure. They get a lot of revenue without having to spend a lot of money. It still yields over 6%, so you are still getting paid to be there. The market discounted the 1^st move down to about $60 a barrel, but on the 2^nd move from $60 to $45; he felt the market was a little more rational. Because of this, he thinks the price is going to stay here longer than a few months, so you are probably going to get another opportunity to average down. He is waiting to see some stability and strength in the commodity price. Hold your position and look for another opportunity to average down.

This company pays out way more than it takes in. His charts, over a long period of time, show the BV is in a gentle, downward trend, but interrupted by sudden jumps when the Company issues cheap equity at a high price to book level. A very, very clever strategy. The stock is strong and as long as there is not a general collapse, the setback we have seen will result in another upward swing. They know how to work the market and they are brilliant at it.

It will move with oil prices. There is movement with the oil prices. If oil prices turn, you will not get as much leverage as an E & P stock. The payout is a bit high.

An interesting stock. He held it and took some profits at around $26. He liked the stock. It was sort of boring, but it is a royalty company. As it came down, he bought some back at around $22. It then fell off with the rest of the market. Just came out with some good news today where they made an acquisition that will be accretive. A very solid stock and the yield is okay. One of the safer royalty companies that you can have. 8.9% dividend yield which he thinks is reasonably safe.

Is the dividend safe? This is an energy stock. If oil prices continue to slide, all dividends in the entire energy sector have to be subject to question. That said, this company has a good balance sheet and the ability to deploy cash between the dividend and reinvestment at a reasonable rate. Their royalty model does make sense.

(Top Pick Jan 8/14, Down 2.41%) Not growing much, but it is replacing its production. Distribution is very safe and conservative. This is a lower risk income scenario.

This is in a Buy range here. This company just pays out the royalties that it receives. Have good properties to drill and he thinks they will continue to expand. At these prices, this is a good Buy. 7.6% dividend yield.