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Freehold Royalties (TSE:FRU)
TSX:FRU
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Freehold Royalties
(TSX:FRU)
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Rating:75Outperform
Price Target:
C$17.00
▲(2.72% Upside)
The score is driven primarily by strong profitability and improving revenue trends, tempered by persistently negative free cash flow and increased debt versus 2023. Technicals are supportive with a clear uptrend across key moving averages, while valuation is helped by a high dividend yield but limited by a mid-teens P/E. Corporate updates are positive, highlighting continued dividends and operational growth.
Freehold Royalties (FRU) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.71B
Dividend Yield7.05%
Average Volume (3M)688.02K
Price to Earnings (P/E)20.4
Beta (1Y)0.94
Revenue Growth2.52%
EPS Growth-8.32%
CountryCA
EmployeesN/A
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.21
Shares Outstanding163,960,330
10 Day Avg. Volume635,950
30 Day Avg. Volume688,025
Financial Highlights & Ratios
PEG Ratio1.04
Price to Book (P/B)1.76
Price to Sales (P/S)6.26
P/FCF Ratio-10.28
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$16.06Price Target Upside-2.93% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Freehold Royalties Business Overview & Revenue Model
Company DescriptionFreehold 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 land in Canada and 0.8 million gross drilling unit acres in the United States. It has royalty interests in approximately 15,000 producing wells and receives royalty from approximately 350 industry operators in North America. The company was founded in 1996 and is headquartered in Calgary, Canada.
How the Company Makes MoneyFreehold Royalties makes money by collecting royalty payments from oil and gas production on its lands. The company owns mineral titles and royalty interests that entitle it to a percentage of the revenue generated from the production of oil and gas. These royalties are typically based on production volumes and commodity prices. The company's revenue streams are significantly influenced by the performance of the oil and gas markets, as well as its ability to acquire and manage high-quality assets. Freehold Royalties also benefits from strategic partnerships with oil and gas operators who manage the day-to-day production activities on the lands, allowing Freehold to maintain a low-cost structure while generating revenue from its royalty interests.
Freehold Royalties Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Mar 04, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong production growth and strategic acquisitions, especially in the U.S., alongside impressive financial performance. However, these positives were tempered by declines in benchmark oil prices and challenges in drilling activities both in the U.S. and Canada.Q2-2025 Updates
Positive Updates
Record Production Levels
Achieved production of 16,584 BOE a day with a liquid weighting of 67%, setting new high watermarks for Freehold.
Strategic Acquisitions Boost U.S. Positioning
9% production growth from Q2 last year, driven by strategic acquisitions in the U.S., particularly in the Permian Basin.
High Productivity Wells Contribution
31 new wells drilled with initial production rates (IP30s) over 73,000 BOE a day, significantly impacting production levels.
Strong Financial Performance
Funds from operations were $57 million in the quarter or $0.35 per share, marking a 40% increase in FFO per share compared to similar oil benchmark prices in 2021.
Successful Dividends and Investments
Paid $44 million in dividends and invested $12 million in acquiring undeveloped mineral title lands in the U.S.
Canadian Oil Plays Growth
Key Canadian oil plays grew by 10% compared to Q2 last year, now making up approximately 30% of Canadian production.
Negative Updates
Benchmark Oil Pricing Decline
Benchmark oil pricing was 11% lower than the previous quarter, dropping almost $8 a barrel to approximately $64 a barrel.
Slowdown in Drilling Rig Activity
Drilling rig activity in the Permian and Eagle Ford basins down about 10% year-to-date compared to last year.
Canadian Drilling Challenges
Seasonal slowdown in Canadian drilling activity and reduced activity in the Cardium due to weaker gas pricing.
Company Guidance
During the Q2 results conference call, Freehold demonstrated strong performance metrics despite market volatility. The company achieved a production rate of 16,584 BOE per day, with a liquid weighting of 67%, marking a 9% production growth compared to last year. This was largely driven by strategic acquisitions in the Permian Basin and high-performing wells with initial production rates (IP30s) exceeding 73,000 BOE per day. Freehold's average net royalty interest on these wells was 1.1%, effectively doubling the average U.S. royalty interest rate. Financially, Freehold reported $57 million in funds from operations, equating to $0.35 per share, representing a 40% increase from four years ago at similar oil prices. The company also paid $44 million in dividends and invested $12 million in undeveloped U.S. mineral title lands, maintaining a net debt of $271 million with a trailing net debt to funds from operations ratio of 1.1x. Additionally, the company projected returns in the high teens to low 20s percentage range from recent land acquisitions.Freehold Royalties Financial Statement Overview
Summary
Strong profitability and improving TTM revenue growth support a solid financial profile, with manageable leverage. The main drag is weak cash conversion: free cash flow remains negative in TTM despite strong operating cash flow, alongside higher debt versus 2023.Income Statement
TTM (Trailing-Twelve-Months) revenue grew 15.3% versus the prior period, showing a rebound after modest declines in 2023–2024. Profitability remains a clear strength with strong margins in TTM (gross margin ~62.7%, net margin ~40.2%) and solid operating earnings generation, though net margin is down from the very strong 2024 level (~48.3%) and well below 2022 (~53.2%). Overall, earnings power is high, but results show some volatility consistent with commodity-driven royalty economics.82
Very Positive
Balance Sheet
Leverage is moderate and manageable, with debt-to-equity around ~0.28 in both TTM (Trailing-Twelve-Months) and 2024, and equity forming a large portion of the capital base. Returns on shareholders’ capital are healthy (TTM return on equity ~12.1%), though down from 2022 (~21.8%) and 2023–2024 (~13–14%). The main balance-sheet watch item is the increase in debt versus 2023 (debt rose materially from ~125M in 2023 to ~285M in TTM), reducing the margin of safety if cash generation softens.78
Positive
Cash Flow
Operating cash flow is strong and improving (TTM operating cash flow ~239M vs ~223M in 2024) and comfortably supports reported earnings (TTM operating cash flow is ~7.4x net income). However, free cash flow is negative in TTM (about -51M) and was deeply negative in 2024 (about -188M), indicating heavy outflows (e.g., capital allocation and/or working-capital swings) despite healthy operating inflows. This weak free-cash profile is the key constraint on financial flexibility, even though free cash flow improved sharply from 2024 to TTM.62
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 320.56M | 309.48M | 314.57M | 393.02M | 206.19M | 89.96M |
| Gross Profit | 201.09M | 199.06M | 305.08M | 281.72M | 118.17M | 10.56M |
| EBITDA | 294.26M | 308.18M | 279.34M | 360.27M | 186.67M | 65.58M |
| Net Income | 128.82M | 149.45M | 131.90M | 209.19M | 72.08M | -13.93M |
Balance Sheet | ||||||
| Total Assets | 1.40B | 1.48B | 1.12B | 1.21B | 1.07B | 829.91M |
| Cash, Cash Equivalents and Short-Term Investments | 0.00 | 0.00 | 0.00 | 524.00K | 2.19M | 1.03M |
| Total Debt | 284.87M | 302.31M | 124.59M | 158.28M | 147.81M | 94.91M |
| Total Liabilities | 369.07M | 383.02M | 194.66M | 251.66M | 179.54M | 170.47M |
| Stockholders Equity | 1.03B | 1.10B | 923.76M | 960.34M | 890.97M | 659.44M |
Cash Flow | ||||||
| Free Cash Flow | -51.36M | -188.38M | 206.27M | 136.55M | -214.98M | 62.13M |
| Operating Cash Flow | 239.48M | 223.33M | 216.92M | 327.35M | 162.02M | 65.77M |
| Investing Cash Flow | -309.11M | -400.37M | -21.18M | -191.18M | -376.61M | -9.55M |
| Financing Cash Flow | 69.63M | 177.03M | -196.24M | -138.08M | 215.78M | -56.36M |
Freehold Royalties Technical Analysis
Positive
16.55
Price Trends
15.28
Positive
14.49
Positive
13.33
Positive
Market Momentum
0.40
Negative
67.22
Neutral
53.33
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 16.55 is above the 20-day moving average (MA) of 15.84, above the 50-day MA of 15.28, and above the 200-day MA of 13.33, indicating a bullish trend. The MACD of 0.40 indicates Negative momentum. The RSI at 67.22 is Neutral, neither overbought nor oversold. The STOCH value of 53.33 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | C$2.73B | 15.57 | 23.55% | 4.58% | 6.44% | -6.74% | |
76 Outperform | C$2.00B | 12.60 | 5.77% | 8.48% | -20.07% | -53.33% | |
75 Outperform | C$2.71B | 20.37 | 13.00% | 7.05% | 2.52% | -8.32% | |
75 Outperform | C$7.02B | 31.82 | 8.16% | 3.76% | -1.59% | 0.09% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
64 Neutral | C$2.14B | ― | 2.34% | 4.60% | -2.32% | 70.14% | |
60 Neutral | C$3.38B | 72.95 | 3.59% | ― | -9.12% | -70.87% |
* Energy Sector Average
TSE:FRU
Freehold Royalties
16.55
4.92
42.33%
TSE:VET
Vermilion Energy
13.93
1.63
13.25%
TSE:HWX
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11.44
5.19
82.89%
TSE:PSK
PrairieSky Royalty
30.15
3.83
14.55%
TSE:PXT
Parex Resources
20.74
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68.30%
TSE:IPCO
International Petroleum Corporation
29.06
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53.35%
Freehold Royalties Corporate Events
Dividends
Freehold Royalties Declares December 2025 Dividend
Positive
Dec 15, 2025
Freehold Royalties Ltd. has announced a dividend of Cdn. $0.09 per common share, payable on January 15, 2026, to shareholders recorded by December 31, 2025. This announcement highlights Freehold’s commitment to providing returns to its shareholders and reinforces its position as a significant player in the North American energy royalty market.
The most recent analyst rating on (TSE:FRU) stock is a Buy with a C$17.50 price target. To see the full list of analyst forecasts on Freehold Royalties stock, see the TSE:FRU Stock Forecast page.
Business Operations and StrategyExecutive/Board Changes
Freehold Royalties Restructures Executive Team Following COO Departure
Neutral
Nov 27, 2025
Freehold Royalties announced the departure of its Chief Operating Officer, Robert King, and the subsequent elimination of the COO role. This decision aligns with the termination of a management agreement with Rife Resources Ltd., leading to a redistribution of responsibilities within the executive team to fit the company’s new operating structure.
The most recent analyst rating on (TSE:FRU) stock is a Buy with a C$17.00 price target. To see the full list of analyst forecasts on Freehold Royalties stock, see the TSE:FRU Stock Forecast page.
Business Operations and StrategyDividendsFinancial Disclosures
Freehold Royalties Reports Strong Q3 2025 Results with Increased Production and Revenue
Positive
Nov 13, 2025
Freehold Royalties reported a strong third quarter for 2025, with a 10% increase in total production to 16,054 boe/d, driven by a significant rise in U.S. production. The company achieved $74 million in revenue and $59 million in funds from operations, while paying $44 million in dividends. The growth was bolstered by strategic acquisitions and enhanced drilling efficiencies, leading to improved well productivity. The company’s diversified, liquids-rich portfolio and North American market exposure have provided stability in cash flows and allowed it to benefit from favorable U.S. natural gas pricing.
The most recent analyst rating on (TSE:FRU) stock is a Buy with a C$15.00 price target. To see the full list of analyst forecasts on Freehold Royalties stock, see the TSE:FRU Stock Forecast page.
Financial Disclosures
Freehold Royalties Schedules Q3 Results Release and Conference Call
Neutral
Nov 6, 2025
Freehold Royalties Ltd. has announced it will release its third-quarter financial results on November 13, 2025, after market close. The company will hold a conference call and webcast on November 14, 2025, to discuss the results, providing an opportunity for stakeholders to gain insights into the company’s performance and strategic direction.
The most recent analyst rating on (TSE:FRU) stock is a Buy with a C$15.00 price target. To see the full list of analyst forecasts on Freehold Royalties stock, see the TSE:FRU Stock Forecast page.
Dividends
Freehold Royalties Declares October 2025 Dividend
Positive
Oct 15, 2025
Freehold Royalties Ltd. has declared a dividend of Cdn. $0.09 per common share, payable on November 17, 2025, to shareholders recorded as of October 31, 2025. This announcement underscores Freehold’s commitment to delivering shareholder value and reflects its stable financial position in the energy royalty sector.
The most recent analyst rating on (TSE:FRU) stock is a Buy with a C$17.00 price target. To see the full list of analyst forecasts on Freehold Royalties stock, see the TSE:FRU Stock Forecast page.
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.