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.