Freehold Royalties

Freehold reported a very strong second quarter and raised its guidance for the remainder of the year.

  • Royalty Revenues up 19% yr/yr
  • Funds from operations up 32% yr/yr
  • Operating Income up 26% yr/yr
  • Net Debt down 49%
  • Average daily production up 5% yr/yr
  • Wells drilled on own land up 152% yr/yr
  • Net debt to 12 month trailing funds from operations  0.40 times
  • Free cash flow yield  6.19-6.80%, one of highest in industry
  • Dividend yield of 4.25% with dividend payout of 56% at low end of range
  • Much cheaper valuation than its major royalty competitor, PrairieSky Royalty
  • 1 year Total Return up 28%, vs. PrairieSky at 14.5% and iShares Canadian Energy ETF XEG at -8.16%

I continue to like Freehold as a long term holding.

Posted in Blog Post.

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