Freehold Royalties Ltd. (TSE:FRU)
OTHER OTC:FRU
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Freehold Royalties
(OTC:FRU)
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Rating:73Outperform
Price Target:
C$19.50
▲(17.33% Upside)
Action:Reiterated
Date:05/15/26
Overall score reflects solid financial strength and profitability with manageable leverage, supported by a constructive technical trend. The earnings call was broadly positive with maintained guidance, strong pricing mix, and shareholder returns, partially offset by near-term volume timing headwinds and modestly higher net debt. Valuation is helped by the high dividend yield but tempered by a mid-range P/E for a cyclical business.
Positive Factors
Royalty business model
Freehold's royalty model requires minimal operating capex and avoids day-to-day operating costs, yielding structurally higher cash flow conversion per barrel produced. Over 2-6 months this supports durable cash generation and dividend capacity, provided third-party operators continue development.
Negative Factors
Revenue decline & earnings pressure
A multi-year step down in revenue and earnings highlights the company's sensitivity to commodity cycles and operator activity. Sustained weaker drilling or price pressure could suppress royalty volumes and slow growth for several quarters, limiting structural earnings momentum.
Read all positive and negative factors
Positive Factors
Negative Factors
Royalty business model
Freehold's royalty model requires minimal operating capex and avoids day-to-day operating costs, yielding structurally higher cash flow conversion per barrel produced. Over 2-6 months this supports durable cash generation and dividend capacity, provided third-party operators continue development.
Read all positive factors
Freehold Royalties (FRU) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.89B
Dividend Yield7.05%
Average Volume (3M)588.13K
Price to Earnings (P/E)31.5
Beta (1Y)0.63
Revenue Growth-7.99%
EPS Growth-44.67%
CountryCA
EmployeesN/A
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.55
Shares Outstanding163,960,330
10 Day Avg. Volume536,220
30 Day Avg. Volume588,130
Financial Highlights & Ratios
PEG Ratio-0.62
Price to Book (P/B)2.49
Price to Sales (P/S)7.95
P/FCF Ratio13.02
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$18.86Price Target Upside13.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)1.06
Revenue Forecast (FY)C$319.11M
Freehold Royalties Business Overview & Revenue Model
Company Description
Freehold Royalties Ltd., an oil and gas royalty company, owns working interests in oil, natural gas, natural gas liquids, and potash properties in Western Canada and the United States. The company holds approximately 6.2 million gross acres of lan...
How the Company Makes Money
Freehold Royalties makes money primarily by owning mineral title and royalty interests and collecting payments when third-party operators produce and sell hydrocarbons from lands where Freehold holds an interest. Key revenue streams typically incl...
Freehold Royalties Earnings Call Summary
Earnings Call Date:May 12, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive operational and financial picture driven by a strong liquids mix, pricing premiums in U.S. assets, solid funds from operations, dividend returns, and strategic Permian acquisitions that add long-term value. Offsetting this were near-term headwinds from lower late-2025 drilling activity, a weather-driven production interruption, slightly higher net debt from strategic land purchases, and cautious U.S. operator behavior delaying some volume growth into late 2026 and 2027. On balance, the positives (production quality, pricing premiums, cash generation, accretive acreage additions, and maintained guidance) outweigh the near-term operational and timing challenges.Positive Updates
Geographic and Pricing Mix Benefits
North American production split 55% Canada / 45% U.S., while the U.S. delivered 51% of total revenue due to higher liquids weighting and market access; U.S. royalty volumes realized a 31% pricing premium versus Canadian production, and U.S. natural gas received a 58% premium over Canadian gas.
Negative Updates
Lower Drilling Activity Impacting Q1
Q1 production was affected by lower drilling activity in late 2025 when WTI averaged below $60, contributing to reduced near-term volume additions.
Read all updates
Q1-2026 Updates
Positive
Negative
Geographic and Pricing Mix Benefits
North American production split 55% Canada / 45% U.S., while the U.S. delivered 51% of total revenue due to higher liquids weighting and market access; U.S. royalty volumes realized a 31% pricing premium versus Canadian production, and U.S. natural gas received a 58% premium over Canadian gas.
Read all positive updates
Company Guidance
Freehold reiterated 2026 production guidance of 15,500–16,300 BOE/d, noting Q1 production of 15,533 BOE/d (65% liquids) was impacted by lower late‑2025 drilling activity and a winter storm (≈300 bbl/d downtime in January, ≈100 BOE/d on average for the quarter), while new drilling in the Viking and Southeast Saskatchewan contributed >225 bbl/d as the quarter closed; management expects post‑spring breakup drilling to support 2026 exit volumes with most incremental production showing up in H2‑2026 and into 2027. In Q1 the company generated $59M of funds from operations ($0.36/share) at ~$72 WTI, paid $44M of dividends, invested $19M in Permian mineral title lands (adding >200 drilling locations) which modestly increased net debt, and highlighted a North American split of 55% Canada/45% U.S. production (U.S. accounted for 51% of revenue), with U.S. volumes realizing a 31% price premium to Canada and U.S. gas a 58% premium—all cited against a spot oil price near $100/bbl and a balance‑of‑year strip in the mid‑to‑upper $80s.Freehold Royalties Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 300.21M | 313.46M | 309.48M | 314.57M | 393.02M | 206.19M |
| Gross Profit | 185.62M | 197.29M | 199.06M | 305.08M | 281.72M | 118.17M |
| EBITDA | 242.63M | 274.95M | 308.18M | 279.34M | 360.27M | 186.67M |
| Net Income | 89.58M | 91.78M | 149.45M | 131.90M | 209.19M | 72.08M |
Balance Sheet | ||||||
| Total Assets | 1.39B | 1.37B | 1.48B | 1.12B | 1.21B | 1.07B |
| Cash, Cash Equivalents and Short-Term Investments | 0.00 | 0.00 | 0.00 | 0.00 | 524.00K | 2.19M |
| Total Debt | 303.18M | 284.65M | 302.31M | 124.59M | 158.28M | 147.81M |
| Total Liabilities | 397.23M | 372.68M | 383.02M | 194.66M | 251.66M | 179.54M |
| Stockholders Equity | 995.82M | 998.39M | 1.10B | 923.76M | 960.34M | 890.97M |
Cash Flow | ||||||
| Free Cash Flow | 183.59M | 191.25M | -188.38M | 206.27M | 136.55M | -214.98M |
| Operating Cash Flow | 218.66M | 235.38M | 223.33M | 216.92M | 327.35M | 162.02M |
| Investing Cash Flow | -50.28M | -42.11M | -400.37M | -21.18M | -191.18M | -376.61M |
| Financing Cash Flow | -168.38M | -193.27M | 177.03M | -196.24M | -138.08M | 215.78M |
Freehold Royalties Technical Analysis
Positive
16.62
Price Trends
17.23
Positive
16.90
Positive
15.29
Positive
Market Momentum
0.02
Negative
56.53
Neutral
74.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FRU, the sentiment is Positive. The current price of 16.62 is below the 20-day moving average (MA) of 17.39, below the 50-day MA of 17.23, and above the 200-day MA of 15.29, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 56.53 is Neutral, neither overbought nor oversold. The STOCH value of 74.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FRU.
Freehold Royalties Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$3.23B | 22.15 | 18.54% | 4.58% | -3.35% | -30.86% | |
73 Outperform | C$2.89B | 31.48 | 8.81% | 7.05% | -7.99% | -44.67% | |
73 Outperform | C$8.09B | 39.25 | 7.89% | 3.76% | -6.33% | -8.64% | |
71 Outperform | C$2.59B | 10.13 | 9.34% | 8.48% | -14.73% | 123.98% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
54 Neutral | C$4.19B | 114.19 | 2.73% | ― | -12.72% | -67.54% | |
53 Neutral | C$2.55B | -2.97 | -33.68% | 4.60% | -7.04% | -2448.68% |
* Energy Sector Average
TSE:FRU
Freehold Royalties
17.20
5.55
47.61%
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Freehold Royalties Corporate Events
Dividends
Freehold Royalties Declares C$0.09 April Dividend, Underscoring Yield Focus
Positive
Apr 15, 2026
Freehold Royalties Ltd. has declared a cash dividend of Cdn. $0.09 per common share for April 2026, payable on May 15, 2026 to shareholders of record as of April 30, 2026. The dividend, designated as an eligible dividend for Canadian tax purposes,...
Executive/Board Changes
Freehold Royalties’ CFO Resigns as Company Begins Search for Successor
Neutral
Apr 13, 2026
Freehold Royalties Ltd., a leading North American energy royalty company with extensive land holdings in Canada and the U.S., earns income from oil and gas royalty interests and is listed on the Toronto Stock Exchange under the symbol FRU. Its ass...
Business Operations and StrategyDividendsFinancial Disclosures
Freehold Royalties Posts Record 2025 Output as U.S. Growth, Liquids Mix Offset Weaker Oil Prices
Positive
Mar 11, 2026
Freehold Royalties reported record 2025 annual production of 16,294 boe/d, up 9% year over year, driven largely by a 33% increase in U.S. volumes and higher liquids weighting to 66%. The company generated $313 million in total revenue and $235 mil...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.