Freehold Royalties Ltd (FRU.TO)

Politics is a terrible way to invest. Freehold will probably do well because of government environmental incentives and the ESG trend. Pembina will do better if the Republicans win in the US or the Tories in Canada. There will still be a need for pipelines; green energy won't do the trick.

Owns shares in company - a bedrock security. Excellent company with good assets and strong management team. Royalty structure creates high margins with low liability (no physical well bores). 

If you're looking for good exposure to the commodity, with a higher yield, he'd recommend this one. Yield is 7.8%, extremely sustainable at current prices. Very good exposure to oil and nat gas, without taking on capex and exploration risk.

Excellent team with strong dividend. Good assets with strong backing from CPP. Lots of prospective lands. Has been expanding USA land footprint. Would recommend holding for the long term. 

FRU is quite cheap at 11X earnings, and it has a strong balance sheet with net debt about 1X cash flow. Free cash flow is good and the dividend is good and now higher than its pre-covid level (it was reduced in the pandemic). In the context of the volatile oil and gas sector, we would be comfortable owning it. 
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A screaming buy at this level. Very cheap. Trades at a 40-50% discount to Prairie Sky and pays a higher 7.9% dividend at 13% free-cash flow yield.

Nearly 7% dividend yield - very strong. Less capital intensive business (doesn't drill wells). Owns shares in business. Recent weakness in share price - good time to buy. Strong management team. Excellent business for the long term shareholder. 

EPS beat estimates of 19c coming in at 23c. Revenue missed estimates of $83.4M coming in at $74.3M and declining 3% year-over-year. Profit increased 9.3% from the prior year. Royalty production dropped 0.7% in the quarter while average price per barrel also dropped 3.8% to C$54.81. The company recorded 22 new leases in the quarter. FRU will be highly dependent on oil prices & production for future growth. The quarter is OK despite the revenue miss and the dividend yield continues to be high.
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Pays a 7.5% dividend, but badly lags its royalty peers. Are struggling to put up a large deal in the Permian. Trades at a cheap 8x PE and the dividend is safe. A lower beta energy name offering modest capital appreciation, and overall good.

Pays nearly an 8% dividend. 40% of its NAV is now in the US and likely 80%of future activity will be there, in the Permian. Are also operating in Canada's Clearwater. They just reported disappointing growth, but he expects more growth in the U.S. rather than Canada. Not his go-to name. Nice dividend and no downside risk. You can sleep at night owning this, but he prefers others like Topaz.

Did well in 2021-2, but sideways in 2023 despite fundamentals improving. Pays a safe 7.8% dividend yield as they build free cash flow. Costs of production are only $5/barrel. Likely is the cheapest royalty company in North America. Downside is $12, while he targets as high as $30.

His preference in the space. A bit less cyclical to commodity prices, as they get royalty payments more on production than on commodity prices. Yield is pretty high, almost 8%. See his Top Picks.

Lower beta way to get exposure to oil and nat gas. Conservative. Attempting M&A in US, but balance sheets are so strong, fewer companies need royalty deals to raise cash. Strong organic growth prospects next year. Yield is 7.5%, payout ratio at low 60% range. Trades at 8.5x, compared to the unjustified 14x for PSK.

Does not own shares, but follows company closely. Very high exposure to energy prices. Excellent company for dividend investors. Prefers companies like CNQ with capital appreciation. 

FRU is such a low-cost producer, it hasn't benefited as much as marginal producers have in the uptick in oil/gas prices. So its margins haven't increased as much. FRU asset package is so good, he's happy to own it despite this year's price action. He likes both names.