Topic: How To Invest

Q: What is your current opinion of Freehold Royalties? Thank you.

Article Excerpt

A: Freehold Royalties Ltd., $8.43, symbol FRU on Toronto (Shares outstanding: 117.8 million; Market cap: $961.4 million;, holds the oil and natural gas rights on 6.4 million acres of land mostly in Alberta and Saskatchewan, but also in British Columbia, Manitoba and Ontario. The company collects royalties from oil and gas producers that operate over 44,000 wells on its land. It also holds royalty interests in eight potash mines in Saskatchewan. In the three months ended March 31, 2019, Freehold’s cash flow per share declined 7.4%, to $0.25 from $0.27. Lower production offset higher realized oil and gas prices. The company’s current quarterly dividend of $0.1575 a share gives it a high yield of 7.5%. Freehold will need increased drilling activity from oil and gas producers to increase the production and royalties on its lands. Still, the company’s strong balance sheet and steady cash flow should let it keep buying up properties at low prices from distressed sellers. That gives it lots of…

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