Freehold Royalties (FRU) AI Stock Analysis

• Market Cap: $1.87B
• Dividend Yield: 9.36%
• Average Volume (3M): 699.61K
• Price to Earnings (P/E): 11.6
• Beta (1Y): 0.96
• Revenue Growth: -1.62%
• EPS Growth: 12.60%
• Country: CA
• Employees: 105
• Sector: Energy
• Sector Strength: 47
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.98
• Shares Outstanding: 163,960,330
• 10 Day Avg. Volume: 532,584
• 30 Day Avg. Volume: 699,611
• PEG Ratio: 0.92
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $14.87
• Price Target Upside: 30.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Freehold Royalties demonstrates strong financial performance and attractive valuation, boosted by high dividends. However, negative cash flow and bearish technical indicators are concerns. The restructuring and ongoing dividend payouts provide a positive outlook, though cash management remains a priority. The overall score reflects a balanced view, weighing profitability and strategic initiatives against current market sentiment and financial challenges.

Positive Factors

Dividend Stability

FRU is capable of continuing to offer investors a stable and growing dividend as it executes on its U.S. expansion strategy—especially against a backdrop of weaker commodity prices.

Royalty Revenue

The assets are expected to generate significant net royalty revenue, contributing to FRU's strong financial position.

U.S. Expansion Strategy

The acquisition increased FRU's U.S. inventory by more than 20%, with the Midland Basin now comprising about 50% of FRU's U.S. production, leading to higher realized pricing.

Negative Factors

Commodity Prices

FRU is highlighted for investors seeking a stable and growing dividend while executing its U.S. expansion strategy, especially in a market with weaker commodity prices.

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 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 Money

Freehold 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 Financial Statement Overview

Summary

Freehold Royalties showcases strong profitability and a solid balance sheet with manageable leverage. However, the recent revenue decline and negative free cash flow in 2024 highlight areas of concern that need close monitoring to maintain financial resilience.

Income Statement

Freehold Royalties has demonstrated strong revenue and profit growth over the years. The gross profit margin for 2024 is approximately 64.33%, which is a robust figure indicating efficient cost management. However, the company saw a decline in total revenue from 2023 to 2024 by approximately 1.62%, which may warrant attention. Net profit margin for 2024 is high at 48.29%, showcasing strong profitability. Both EBIT and EBITDA margins are unavailable for 2024, but previous years show consistent profitability.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of around 0.28 for 2024, indicating a conservative use of leverage. Return on equity (ROE) for 2024 is approximately 13.60%, reflecting efficient use of equity capital. The equity ratio stands at 74.16%, suggesting a strong equity base relative to total assets.

Cash Flow

Freehold Royalties experienced a significant decline in free cash flow in 2024, resulting in a negative figure, which could indicate potential cash management challenges. The operating cash flow to net income ratio for 2024 is approximately 1.49, showing strong cash generation relative to net income. However, the free cash flow to net income ratio is negative, highlighting the need for careful cash flow management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
309.48M	314.57M	393.02M	206.19M	89.96M
	Gross Profit
199.06M	305.08M	281.72M	118.17M	10.56M
	EBIT
0.00	286.00M	257.57M	98.53M	-4.42M
	EBITDA
308.18M	279.34M	377.76M	186.67M	65.58M
	Net Income Common Stockholders
149.45M	131.90M	209.19M	72.08M	-13.93M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	0.00	524.00K	2.19M	1.03M
	Total Assets
1.48B	1.12B	1.21B	1.07B	829.91M
	Total Debt
302.31M	124.59M	158.28M	147.81M	94.91M
	Net Debt
302.31M	124.59M	157.75M	145.63M	93.89M
	Total Liabilities
383.02M	194.66M	251.66M	179.54M	170.47M
	Stockholders Equity
1.10B	923.76M	960.34M	890.97M	659.44M
Cash Flow		Free Cash Flow
-188.38M	206.27M	136.55M	-214.98M	62.13M
	Operating Cash Flow
223.33M	216.92M	327.35M	162.02M	65.77M
	Investing Cash Flow
-400.37M	-21.18M	-191.18M	-376.61M	-9.55M
	Financing Cash Flow
177.03M	-196.24M	-138.08M	215.78M	-56.36M

Freehold Royalties Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.43
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FRU, the sentiment is Negative. The current price of 11.43 is below the 20-day moving average (MA) of 11.48, below the 50-day MA of 12.03, and below the 200-day MA of 12.71, indicating a bearish trend. The MACD of -0.14 indicates Negative momentum. The RSI at 43.15 is Neutral, neither overbought nor oversold. The STOCH value of 16.06 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:FRU.

Freehold Royalties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FRU	69 Neutral	$1.87B	11.56	14.86%	9.36%	-1.62%	12.60%
TPZ	68 Neutral	C$3.54B	72.74	3.62%	5.69%	-2.25%	-3.28%
Sector *	56 Neutral	$6.92B	3.31	-4.49%	6.03%	-0.35%	-47.83%

Freehold Royalties Corporate Events

Freehold Royalties Restructures Business with New Dedicated Leadership

Freehold Royalties Ltd. has announced the termination of its management agreement with Rife Resources Management Ltd., effective May 1, 2025, marking a significant shift in its business structure. This transition to a dedicated executive team is expected to streamline operations and simplify governance, reinforcing Freehold’s position as a leading North American royalty company, with continued support from its largest shareholder, CN Investment Division.

Spark’s Take on TSE:FRU Stock

According to Spark, TipRanks’ AI Analyst, TSE:FRU is a Outperform.

Freehold Royalties’ overall score reflects strong financial performance and valuation, offset by negative cash flow concerns and bearish technical indicators. The company’s strategic growth initiatives and high dividend yield offer a positive long-term outlook, but cash flow management remains a priority.

To see Spark’s full report on TSE:FRU stock, click here.

Freehold Royalties Declares April 2025 Dividend

Freehold Royalties Ltd. has announced a dividend of Cdn. $0.09 per common share, payable on May 15, 2025, to shareholders of record as of April 30, 2025. This announcement reflects Freehold’s ongoing commitment to providing value to its shareholders and underscores its stable financial position within the energy royalty sector.

Spark’s Take on TSE:FRU Stock

According to Spark, TipRanks’ AI Analyst, TSE:FRU is a Neutral.

Freehold Royalties’ strong financial performance and attractive valuation are somewhat offset by negative cash flow issues and bearish technical indicators. Strategic growth initiatives and high dividend yield provide positive outlooks, but cash flow management and market sentiment need attention.

To see Spark’s full report on TSE:FRU stock, click here.

Freehold Royalties Reports Strong 2024 Results and Strategic Growth

Freehold Royalties Ltd. reported strong financial and operational results for 2024, with significant revenue and funds from operations. The company achieved a notable increase in production and reserves, driven by organic growth and strategic acquisitions, including a major acquisition in the Midland Basin. These results underscore Freehold’s robust industry positioning and potential for future growth, benefiting stakeholders through increased dividends and enhanced asset value.

Freehold Royalties Announces February 2025 Dividend

Freehold Royalties has announced a dividend of Cdn. $0.09 per common share, payable on March 17, 2025, to shareholders of record as of February 28, 2025. This declaration continues to position Freehold as a significant player in the energy royalty sector, providing shareholders with regular income and reinforcing its stable financial outlook.