Freehold Royalties Ltd (FRU.TO) Buy, Sell or…

Freehold Royalties Ltd (FRU.TO)

16.82

-0.01 (0.06%)

as of Sep 25, 2026, 8:00:00 pm Market Open.

553 watching

BUY

A well-run company. Zero debt. Yields close to 7%. It had a nice bounce off the bottom recently. It's a safe company even though it's in Canadian oil/gas. FRU benefit from oil companies struggling to raise capital; these companies can. instead, sell a royalty on their production to FRU and supply them with capital. It's a good cash-flow business.

COMMENT

A good royalty company that pays over a 7% yield (safe), with a payout ratio over 60%. They carry no debt. The only problem with their model happens when their oil drillers don't drill, as they did last year. If this happens, collect the yield and wait.

DON'T BUY

He likes royalty companies because do not have the risk of operating exposure. They are in the oil space in Canada. They take a piece of the production. The difficulty of royalties in the oil and gas industries is the short life of the wells. Therefore the certainty of the cash flow is not as high as what they were several years ago.

PAST TOP PICK

(A Top Pick Jan 10/18, Down 30%) Just at the end of the year it dropped. He thinks this will get back to $12 this year, $14 will require a lot of stars to align. He still likes it and would stick with it.

DON'T BUY

A royalty play. They buy oil and gas from producers. Where is the price of oil and gas going? He has no idea. But oil and gas will be weak in a recession which he expects to happen. Look at Franco-Nevada if you want a royalty play. This may be good if you have a long-term horizon.

DON'T BUY

His longer term concern is that as a royalty, their cash flow will be declining with reduced exploration. Until there is better clarification on pipeline issues, he is luke-warm on the Canadian energy sector. He believes the monthly dividend is fairly secure, but worries about it longer term. Yield 7.9%

PAST TOP PICK

(A Top Pick Jan 10/18, Down 31%) These should be safer than the producers. But as soon as a producer turns off the tap, the royalty does not have to be paid. This is really good value here. This is a play on oil returning to better times.

HOLD

Pays a fair 6.5% dividend yield. Things are as bleak as they can be in Canadian oil. FRU is generating enough cash to pay their dividend. Don't buy more or enter it. Hold.

BUY

This is one of the four oil and gas stocks he holds. The company has very low capital risk and is a steady dividend payer. He thinks they can again grow the dividend next year. Very attractive at these levels. Yield 5.7%.

SHORT

A small short position for him. It is a hedge for him, also. It beat on a recent quarter, but the payout ratio is high and it is too expensive. It has poor price momentum.

PAST TOP PICK

(Past Top Pick, November 16, 2017, Down 23%) Pays a 5.5% yield. Today it hit a 52-week low. He's happy to buy it this cheap.

TOP PICK

Cheapest royalty company. Mainly oil royalty. Good presence in Viking, a hot player in western Canada. Great assets. Tons of free cash flow. It's very cheap with a great balance sheet and a growing dividend. (Analysts’ price target is $17.37)

PAST TOP PICK

(A Top Pick Feb 8/17, Up 8%) It is going to boost its dividend each year. You should get 10% total return. It is a nice conservative way to play a volatile sector.

PAST TOP PICK

(A Top Pick August 1/17 - Down 11.9%). A buying opportunity. Oil price is higher. Gas price is down but they have improved their franchise with some good deals. Pristine balance sheet. One of the cheapest royalties plays you can find in the market. Great assets. Dividend yield of 4%. Pay you to wait.

WATCH

He does not hold a significant position in this at the moment. If you know where oil prices will be, you will know what to do. He thinks management may be looking to divest themselves of operating assets in favour of holding only royalty assets. If that was done, he believes, the company could get a positive re-valuation rating. He is therefore watching this as a potential buy soon.

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Freehold Royalties Ltd (FRU.TO)