Freehold Royalties (TSE:FRU)
TSX:FRU
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Freehold Royalties
(TSX:FRU)
Select Model
Select Model
Rating:65Neutral
Price Target:
C$18.50
▲(9.34% Upside)
Action:DowngradedDate:03/13/26
The score is driven mainly by above-average financial strength (strong profitability and conservative leverage) offset by revenue softness and unstable free cash flow. Technicals are neutral-to-mildly positive longer term but weak near term, and valuation is held back by a high P/E despite a strong dividend yield.
Positive Factors
Asset-light royalty model
Freehold's royalty business generates revenue without owning or operating wells, keeping capital and operating expense requirements low. That model tends to be durable across commodity cycles, supporting steadier margins and the ability to pay distributions while avoiding producer-level capex volatility.
Negative Factors
Recent revenue decline
Declining revenue over several recent years signals structural headwinds: weaker production on owned lands or reduced leasing activity. For a royalty company, persistent revenue erosion limits distributable cash, constrains organic growth prospects, and increases reliance on acquisitions to maintain long-term cash flow.
Read all positive and negative factors
Positive Factors
Negative Factors
Asset-light royalty model
Freehold's royalty business generates revenue without owning or operating wells, keeping capital and operating expense requirements low. That model tends to be durable across commodity cycles, supporting steadier margins and the ability to pay distributions while avoiding producer-level capex volatility.
Read all positive factors
Freehold Royalties (FRU) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.77B
Dividend Yield7.05%
Average Volume (3M)991.76K
Price to Earnings (P/E)27.1
Beta (1Y)0.72
Revenue Growth2.52%
EPS Growth-8.32%
CountryCA
EmployeesN/A
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.09
Shares Outstanding163,960,330
10 Day Avg. Volume895,804
30 Day Avg. Volume991,764
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$18.73Price Target Upside10.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.58
Revenue Forecast (FY)C$323.30M
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 collecting royalties tied to oil and natural gas production on lands where it owns mineral title and/or royalty interests. Its core revenue stream is royalty revenue: when third-party exploration and pro...
Freehold Royalties Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:May 13, 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.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.
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.
Read all updates
Q2-2025 Updates
Positive
Negative
Record Production Levels
Achieved production of 16,584 BOE a day with a liquid weighting of 67%, setting new high watermarks for Freehold.
Read all positive updates
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
Income Statement
72
Positive
Balance Sheet
79
Positive
Cash Flow
60
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 313.46M | 309.48M | 314.57M | 393.02M | 206.19M |
| Gross Profit | 197.29M | 199.06M | 305.08M | 281.72M | 118.17M |
| EBITDA | 274.95M | 308.18M | 279.34M | 360.27M | 186.67M |
| Net Income | 91.78M | 149.45M | 131.90M | 209.19M | 72.08M |
Balance Sheet | |||||
| Total Assets | 1.37B | 1.48B | 1.12B | 1.21B | 1.07B |
| Cash, Cash Equivalents and Short-Term Investments | 0.00 | 0.00 | 0.00 | 524.00K | 2.19M |
| Total Debt | 284.65M | 302.31M | 124.59M | 158.28M | 147.81M |
| Total Liabilities | 372.68M | 383.02M | 194.66M | 251.66M | 179.54M |
| Stockholders Equity | 998.39M | 1.10B | 923.76M | 960.34M | 890.97M |
Cash Flow | |||||
| Free Cash Flow | 191.25M | -188.38M | 206.27M | 136.55M | -214.98M |
| Operating Cash Flow | 235.38M | 223.33M | 216.92M | 327.35M | 162.02M |
| Investing Cash Flow | -42.11M | -400.37M | -21.18M | -191.18M | -376.61M |
| Financing Cash Flow | -193.27M | 177.03M | -196.24M | -138.08M | 215.78M |
Freehold Royalties Technical Analysis
Neutral
16.92
Price Trends
17.08
Negative
15.97
Positive
14.44
Positive
Market Momentum
-0.02
Positive
45.31
Neutral
42.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FRU, the sentiment is Neutral. The current price of 16.92 is below the 20-day moving average (MA) of 17.27, below the 50-day MA of 17.08, and above the 200-day MA of 14.44, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 45.31 is Neutral, neither overbought nor oversold. The STOCH value of 42.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
86 Outperform | C$2.38B | 5.03 | 5.77% | 8.48% | -20.07% | -53.33% | |
82 Outperform | C$2.84B | 14.55 | 20.71% | 4.58% | 6.44% | -6.74% | |
76 Outperform | C$7.42B | 30.68 | 7.90% | 3.76% | -1.59% | 0.09% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | C$2.77B | 27.14 | 8.82% | 7.05% | 2.52% | -8.32% | |
65 Neutral | C$2.76B | -2.69 | -24.89% | 4.60% | -2.32% | 70.14% | |
60 Neutral | C$3.97B | 70.08 | 3.12% | ― | -9.12% | -70.87% |
* Energy Sector Average
TSE:FRU
Freehold Royalties
16.92
6.86
68.21%
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Freehold Royalties Corporate Events
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...
Dividends
Freehold Royalties Declares February 2026 Dividend
Positive
Feb 12, 2026
Freehold Royalties Ltd. announced that its board has declared a monthly dividend of C$0.09 per common share for February 2026, payable on March 16, 2026 to shareholders of record as of February 27, 2026. The dividend is designated as an eligible d...
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 share...
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.