Latest news with #FreeholdRoyalties
Yahoo
01-08-2025
- Business
- Yahoo
Freehold Royalties Ltd (FRHLF) Q2 2025 Earnings Call Highlights: Strategic Growth Amidst Market ...
Release Date: July 31, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Freehold Royalties Ltd (FRHLF) achieved a 9% production growth from the second quarter of last year, reflecting strategic acquisitions that expanded their US positioning. The company reported strong liquids production in Q2, with a liquid weighting of 67% and significant contributions from high productivity wells. Funds from operations were $57 million in the quarter, marking a 40% increase in FFO per share compared to a similar WTI oil benchmark price four years ago. Freehold Royalties Ltd (FRHLF) maintained a strong balance sheet with net debt of $271 million, representing a 1.1 times trailing net debt to funds from operations. The company paid $44 million in dividends to shareholders and invested $12 million in acquiring undeveloped mineral title lands in the US, indicating a focus on growth and shareholder returns. Negative Points Benchmark oil pricing was 11% lower than the previous quarter, dropping almost $8 a barrel to approximately $64 US a barrel, impacting revenue. There was a slowdown in drilling rig activity in both the Permian and Eagleford basins, with both down about 10% year-to-date compared to last year. The Canadian Cardium play requires stronger gas pricing to be economically viable, leading to reduced activity levels. The Viking play is not expected to represent growth in the portfolio, with a flat production profile anticipated going forward. The company is not seeing the same level of M&A opportunities as in prior years, which could limit growth through acquisitions. Q & A Highlights Warning! GuruFocus has detected 6 Warning Sign with FRHLF. Q: Freehold had strong liquids production in Q2. Can you walk us through your outlook for liquids production for the rest of the year? A: (Rob King, COO) Q2 saw significant NGL volume growth, particularly in the US, with a 30% increase quarter-over-quarter. This was partly due to a prior period adjustment and additional liquids from new wells. We expect continued liquids growth from both Canadian and US assets, with high liquids weightings in the Midland and Eagleford positions. Q: The Canadian number of wells is down, particularly in the Viking and Cardium areas. Is this due to higher gas weighting and commodity prices? How do you see activity in these areas moving forward? A: (David Spiker, CEO) The Cardium requires stronger gas pricing for economic viability, leading to reduced activity. The Viking is more seasonal, with consistent activity but not expected to drive growth. We see growth coming from other areas in our portfolio. Q: Do you have exposure in the Belly River, which is gaining attention for its liquid production? A: (David Spiker, CEO) Yes, we have reasonable exposure in the Belly River. Some leasing in Q2 was in this area, and we expect it to continue attracting capital and be a growth area for us. Q: How do you see the M&A landscape, and is there potential for a significant deal before year-end? A: (David Spiker, CEO) We're focusing on acquiring undeveloped mineral title lands in the US, which offer high returns. While there are potential larger packages being marketed, we don't have details yet on their scale or scope. Q: Regarding the balance sheet and dividend, is it reasonable to expect dividend growth alongside M&A outlook? A: (Shayna Morihara, CFO) We're comfortable with our 60% payout ratio and $0.09 per month dividend. We'll continue to evaluate this with any M&A activity, but we believe we're at a competitive level currently. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
01-08-2025
- Business
- Yahoo
Freehold Royalties Ltd (FRHLF) Q2 2025 Earnings Call Highlights: Strategic Growth Amidst Market ...
Release Date: July 31, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Freehold Royalties Ltd (FRHLF) achieved a 9% production growth from the second quarter of last year, reflecting strategic acquisitions that expanded their US positioning. The company reported strong liquids production in Q2, with a liquid weighting of 67% and significant contributions from high productivity wells. Funds from operations were $57 million in the quarter, marking a 40% increase in FFO per share compared to a similar WTI oil benchmark price four years ago. Freehold Royalties Ltd (FRHLF) maintained a strong balance sheet with net debt of $271 million, representing a 1.1 times trailing net debt to funds from operations. The company paid $44 million in dividends to shareholders and invested $12 million in acquiring undeveloped mineral title lands in the US, indicating a focus on growth and shareholder returns. Negative Points Benchmark oil pricing was 11% lower than the previous quarter, dropping almost $8 a barrel to approximately $64 US a barrel, impacting revenue. There was a slowdown in drilling rig activity in both the Permian and Eagleford basins, with both down about 10% year-to-date compared to last year. The Canadian Cardium play requires stronger gas pricing to be economically viable, leading to reduced activity levels. The Viking play is not expected to represent growth in the portfolio, with a flat production profile anticipated going forward. The company is not seeing the same level of M&A opportunities as in prior years, which could limit growth through acquisitions. Q & A Highlights Warning! GuruFocus has detected 6 Warning Sign with FRHLF. Q: Freehold had strong liquids production in Q2. Can you walk us through your outlook for liquids production for the rest of the year? A: (Rob King, COO) Q2 saw significant NGL volume growth, particularly in the US, with a 30% increase quarter-over-quarter. This was partly due to a prior period adjustment and additional liquids from new wells. We expect continued liquids growth from both Canadian and US assets, with high liquids weightings in the Midland and Eagleford positions. Q: The Canadian number of wells is down, particularly in the Viking and Cardium areas. Is this due to higher gas weighting and commodity prices? How do you see activity in these areas moving forward? A: (David Spiker, CEO) The Cardium requires stronger gas pricing for economic viability, leading to reduced activity. The Viking is more seasonal, with consistent activity but not expected to drive growth. We see growth coming from other areas in our portfolio. Q: Do you have exposure in the Belly River, which is gaining attention for its liquid production? A: (David Spiker, CEO) Yes, we have reasonable exposure in the Belly River. Some leasing in Q2 was in this area, and we expect it to continue attracting capital and be a growth area for us. Q: How do you see the M&A landscape, and is there potential for a significant deal before year-end? A: (David Spiker, CEO) We're focusing on acquiring undeveloped mineral title lands in the US, which offer high returns. While there are potential larger packages being marketed, we don't have details yet on their scale or scope. Q: Regarding the balance sheet and dividend, is it reasonable to expect dividend growth alongside M&A outlook? A: (Shayna Morihara, CFO) We're comfortable with our 60% payout ratio and $0.09 per month dividend. We'll continue to evaluate this with any M&A activity, but we believe we're at a competitive level currently. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-07-2025
- Business
- Yahoo
Freehold Royalties (TSE:FRU) Is Paying Out A Dividend Of CA$0.09
Freehold Royalties Ltd. (TSE:FRU) has announced that it will pay a dividend of CA$0.09 per share on the 15th of August. This means the annual payment is 8.2% of the current stock price, which is above the average for the industry. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Estimates Indicate Freehold Royalties' Could Struggle to Maintain Dividend Payments In The Future Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Before this announcement, Freehold Royalties was paying out 109% of what it was earning, and not generating any free cash flows either. Paying out such a large dividend compared to earnings while also not generating free cash flows is a major warning sign for the sustainability of the dividend as these levels are certainly a bit high. Looking forward, earnings per share is forecast to fall by 22.4% over the next year. If the dividend continues along the path it has been on recently, the payout ratio in 12 months could be 147%, which is definitely a bit high to be sustainable going forward. See our latest analysis for Freehold Royalties Dividend Volatility The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2015, the dividend has gone from CA$1.68 total annually to CA$1.08. Doing the maths, this is a decline of about 4.3% per year. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems. Freehold Royalties Might Find It Hard To Grow Its Dividend Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's encouraging to see that Freehold Royalties has been growing its earnings per share at 102% a year over the past five years. Although earnings per share is up nicely Freehold Royalties is paying out 109% of its earnings as dividends, which we feel is borderline unsustainable without extenuating circumstances. Freehold Royalties' Dividend Doesn't Look Sustainable In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Freehold Royalties' payments, as there could be some issues with sustaining them into the future. While we generally think the level of distributions are a bit high, we wouldn't rule it out as becoming a good dividend payer in the future as its earnings are growing healthily. Overall, we don't think this company has the makings of a good income stock. Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Freehold Royalties that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
09-07-2025
- Business
- Yahoo
How I'd Build a $1,000 Monthly Income Stream With Just These 2 Stocks
Written by Amy Legate-Wolfe at The Motley Fool Canada Creating a $1,000 monthly income stream with just two TSX stocks may seem like a big ask. But with a little capital and the right mix of reliability and yield, it can be done. The secret is focusing on cash-generating businesses with high distributions and strong fundamentals. For this, I'd lean on Slate Grocery REIT (TSX: and Freehold Royalties (TSX:FRU). These two dividend stocks may operate in very different sectors, but both serve up serious passive income potential. Slate Grocery REIT is in the business of owning U.S. grocery-anchored retail centres. In a market filled with uncertainty, that's not a bad place to be. Grocery stores are considered essential, which means Slate's tenants tend to be stable and long term. The real estate investment trust (REIT) focuses on distributing regular income to unit holders. In Q1 2025, Slate earned US$16.1 million in net income and US$12.3 million of that was attributable to unit holders. Funds from operations (FFO) came in at US$19.6 million, while monthly distributions were maintained at about $1.20 per unit on an annual basis. With a Canadian unit price around $11.20, that works out to a yield close to 8.2%, paid in cash every single month. Its occupancy sits near 94.2%, and Slate collected 99.1% of rents due in the quarter. These are not small figures for a REIT operating in the current environment. Still, risks do exist. Slate carries over $1.2 billion in debt and a leverage ratio just over 52%. Interest rates will keep pressure on refinancing costs and could cap short-term growth. But as long as the rent keeps flowing and grocery stores stay full, the REIT should be able to maintain distributions and slowly grow its property base. Now on to Freehold Royalties. This isn't your average energy company. Freehold doesn't drill wells, it collects royalties. That means it gets paid based on production by third-party operators across Canada and the U.S., without the headaches of managing rigs or hiring crews. In Q1 2025, Freehold posted royalty and other revenue of $91.1 million, up 23% from the year before. FFO hit $68.1 million, translating to $0.42 per share. Dividends paid come to $0.09 monthly or $1.08 annually, good for a yield of about 8.4%. Freehold's production hit a record 16,248 barrels of oil equivalent per day, with 65% of that from higher-value liquids. Its U.S. assets continue to grow, representing 43% of production and 54% of revenue in Q1. This diversification adds stability. Freehold's payout ratio was 65%, and the balance sheet remains healthy with net debt at $272 million and a debt-to-cash-flow ratio of just 1.1 times. That's comfortable for an energy royalty firm. Still, the dividend stock isn't immune to energy prices. A sharp drop in oil could impact future cash flows and put pressure on dividend sustainability, but management appears disciplined and has room to adjust capital plans if needed. So, how would you get to $1,000 a month in income using only these two? It could be split evenly between the two, or weighted depending on your income preferences. Slate's monthly payout provides regular income flow, while Freehold's quarterly dividend could be smoothed out over time. With the two invested in equally, here's how it could shake out. COMPANY RECENT PRICE NUMBER OF SHARES DIVIDEND TOTAL PAYOUT FREQUENCY TOTAL INVESTMENT FRU $42.00 500 $3.84 $1,910.00 Monthly $21,000.00 $14.10 8,842 $1.18 $10,433.56 Monthly $124,672.20 Total — — — $12,343.56 — $145,672.20 There's no such thing as a risk-free yield, especially in today's market. Slate faces refinancing pressures, and Freehold rides the waves of energy prices. But both dividend stocks have proven their ability to generate strong, stable cash flows. And yes, $145,672 is a lot to invest. For investors seeking dependable monthly income without chasing too many stocks, these two could form the foundation of a simple, powerful strategy. The post How I'd Build a $1,000 Monthly Income Stream With Just These 2 Stocks appeared first on The Motley Fool Canada. Before you buy stock in Freehold Royalties Ltd., consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Freehold Royalties Ltd. wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $24,927.94!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Freehold Royalties and Slate Grocery REIT. The Motley Fool has a disclosure policy. 2025
Yahoo
21-06-2025
- Business
- Yahoo
How to Use $10,000 to Transform a TFSA Into a Cash Machine
Written by Amy Legate-Wolfe at The Motley Fool Canada With Canadians facing rising costs and tighter budgets, many are rethinking how to grow their savings. That makes the idea of building a cash-pumping Tax-Free Savings Account (TFSA) more appealing than ever. If I had $10,000 to work with today, I'd aim to build a portfolio that offers regular, reliable income without a lot of upkeep. That's why I'd split the investment between Freehold Royalties (TSX:FRU) and SmartCentres REIT (TSX: Freehold Royalties is a Canadian energy company that owns land and collects royalties from oil and gas operations on that land. It doesn't drill or operate wells, which keeps costs low. Instead, it earns income based on the production happening on its properties. That structure means Freehold still benefits from higher energy prices but avoids many of the risks that come with operating in the field. As of its latest earnings report, Freehold reported revenue of $86.6 million and net income of $56.3 million. Earnings per share (EPS) came in at $0.23, matching results from the same quarter last year. It currently trades around $12.75 per share and offers a monthly dividend of $0.09. If I invested $5,000 into Freehold today, I'd earn roughly $421 in annual income, all tax-free inside a TFSA. SmartCentres REIT offers another way to collect consistent income. It owns and manages shopping centres across Canada, many of which are anchored by grocery stores, pharmacies, and big-box retailers like Walmart. These tenants help create stable, long-term cash flow. In uncertain economic conditions, properties like this tend to hold their value and provide steady rent. In the first quarter of 2025, SmartCentres reported revenue of $228.6 million and net income of $7.9 million, reversing a loss from the same period in 2024. The real estate investment trust pays a monthly distribution of $0.15417 per unit, translating to about $1.85 annually, with a recent share price at $25.50. A $5,000 investment here would bring in just over $360 per year in tax-free income. What I like about this mix is the balance between sectors. Freehold is exposed to energy markets, which can be volatile, but the royalty structure provides downside protection. SmartCentres is tied to retail, but with its essential-service tenants, it's more resilient than many other commercial real estate plays. Together, they smooth out the bumps and keep cash flowing. With $10,000 split evenly between the two, I could generate about $780 in annual tax-free income. That's more than $65 a month! With plenty of potential for those payouts to grow over time. Both companies have histories of adjusting their payouts as conditions improve. So, if commodity prices rise or rental income increases, the dividend cheques could grow, too. COMPANY RECENT PRICE NUMBER OF SHARES DIVIDEND TOTAL PAYOUT FREQUENCY INVESTMENT TOTAL FRU $12.79 390 $1.08 $421.20 Monthly $4,990.20 $25.59 195 $1.85 $360.75 Monthly $4,993.05 What makes this even more appealing is that the income arrives monthly. That's helpful for budgeting or reinvesting. In a TFSA, reinvested income can help compound returns faster since none of it gets eaten up by taxes. Over time, the portfolio could grow not just from dividends but also from capital appreciation if the share prices rebound. Of course, no investment is without risk. Energy markets fluctuate, and retail real estate can be sensitive to economic shifts. But both Freehold and SmartCentres have proven they can manage through different conditions. Each stayed profitable, paid distributions, and kept investors in the game. For Canadians looking to stretch every dollar and build a financial cushion, this approach makes sense. It's simple, stable, and focused on regular income. With mortgage payments on the rise and the cost of living climbing, having monthly income from solid Canadian stocks can offer some real peace of mind. If I had $10,000 to invest today, I wouldn't chase risky growth. I'd look to Freehold and SmartCentres to build a TFSA that works as hard as I do. With consistent payouts and room to grow, this duo could turn a modest sum into a powerful cash machine for years to come. The post How to Use $10,000 to Transform a TFSA Into a Cash Machine appeared first on The Motley Fool Canada. More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Freehold Royalties and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy. 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
