Freehold Royalties

He can't figure out why these types of royalty companies are going out of favour. This type of environment is a good for royalty companies. The dividend is 8.41%. This is an oil and gas name that is safe to own this year. He thinks they will increase the dividend this year. (Analysts’ price target is $10.37)

(A Top Pick Aug 26/19, Down 0.3%) Has added to his position. A free cashflow machine. Great balance sheet. When the energy sector turns, this stock will take off. Free cashflow yield is 13-14%. A lot of upside. Yield is 9%.

It is a great time to be in a royalty company. This is one of the 4 oil and gas holdings he has. This company is pretty sleepy. They recently have been taking on debt, which they don't usually do. They are finding small deals to do because producers are struggling. He likes it and thinks it is well run.

Every time it comes back up it gets beaten down. We are right at the 2009 levels. You have a place to hang your hat here. If it is breaking down here there are bigger problems with this one. You are probably going to get some kind of a dividend cut announcement which the market has already discounted. Expect some volatility.

A yield of this level is always a worry, even though management has said it is sustainable. Technically speaking, he looks back to 2009 to see support around current levels. He worries about trying to bottom feed here only to have the distribution cut. A speculative buy here. Yield 9%

Oil stocks have been slaughtered. This is like owning Saudi oil--FRU's cost of production is $5/barrel. So even if oil plunges to $30, it still makes money. These royalty companies are a great investment. Pays a 9% dividend, paying only 60% of free cash flow. A screaming bargain. (Analysts’ price target is $11.55)

It is one of the higher quality Canadian energy stocks to own. He likes the dividend. There is some hope of Trans-Mountain getting some good news. It does not have much debt. Be patient with it and don't be overweight energy. Don't sell it here.

Their development costs are low, and they pay a dividend. Rising oil prices is a tailwind. He recently bought it. Likes it.

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.

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.

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.

(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.

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.

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%