Executive Summary
Freehold Royalties Ltd., an oil and gas royalty company, owns working interests in oil, natural gas, and potash properties in Western Canada and the United States.
Rewards
Risk Analysis
Snowflake Analysis
Excellent balance sheet and fair value.
Share Price & News
How has Freehold Royalties's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: FRU has not had significant price volatility in the past 3 months.
Market Performance
7 Day Return
10.0%
FRU
5.3%
CA Oil and Gas
3.1%
CA Market
1 Year Return
-53.6%
FRU
-28.1%
CA Oil and Gas
-8.2%
CA Market
Return vs Industry: FRU underperformed the Canadian Oil and Gas industry which returned -29.6% over the past year.
Return vs Market: FRU underperformed the Canadian Market which returned -9.6% over the past year.
Shareholder returns
| FRU | Industry | Market | |
|---|---|---|---|
| 7 Day | 10.0% | 5.3% | 3.1% |
| 30 Day | 6.5% | -0.5% | 4.2% |
| 90 Day | 24.2% | 15.3% | 14.5% |
| 1 Year | -49.2%-53.6% | -24.2%-28.1% | -5.0%-8.2% |
| 3 Year | -67.0%-73.1% | -26.8%-35.7% | 7.8%-2.6% |
| 5 Year | -62.5%-72.6% | -24.8%-37.6% | 29.1%9.3% |
Price Volatility Vs. Market
How volatile is Freehold Royalties's share price compared to the market and industry in the last 5 years?
Simply Wall St News
5 days ago | Simply Wall St
Is Freehold Royalties (TSE:FRU) Using Too Much Debt?3 months ago | Simply Wall St
If You Had Bought Freehold Royalties (TSE:FRU) Stock Five Years Ago, You'd Be Sitting On A 81% Loss, Today3 months ago | Simply Wall St
A Sliding Share Price Has Us Looking At Freehold Royalties Ltd.'s (TSE:FRU) P/E RatioValuation
Is Freehold Royalties undervalued compared to its fair value and its price relative to the market?
48.0%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: FRU (CA$3.75) is trading below our estimate of fair value (CA$7.22)
Significantly Below Fair Value: FRU is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: FRU is poor value based on its PE Ratio (136.8x) compared to the CA Oil and Gas industry average (12.6x).
PE vs Market: FRU is poor value based on its PE Ratio (136.8x) compared to the Canadian market (13.4x).
Price to Earnings Growth Ratio
PEG Ratio: Insufficient data to calculate FRU's PEG Ratio to determine if it is good value.
Price to Book Ratio
PB vs Industry: FRU is good value based on its PB Ratio (0.7x) compared to the CA Oil and Gas industry average (0.8x).
Next Steps
Future Growth
How is Freehold Royalties forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?
-4.7%
Forecasted annual revenue growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: Insufficient data to determine if FRU's forecast earnings growth is above the savings rate (1.7%).
Earnings vs Market: Insufficient data to determine if FRU's earnings are forecast to grow faster than the Canadian market
High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: FRU's revenue is expected to decline over the next 3 years (-4.7% per year).
High Growth Revenue: FRU's revenue is forecast to decline over the next 3 years (-4.7% per year).
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: Insufficient data to determine if FRU's Return on Equity is forecast to be high in 3 years time
Next Steps
Past Performance
How has Freehold Royalties performed over the past 5 years?
-17.6%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: FRU has a large one-off loss of CA$14.1M impacting its March 31 2020 financial results.
Growing Profit Margin: FRU's current net profit margins (2.5%) are higher than last year (1.8%).
Past Earnings Growth Analysis
Earnings Trend: FRU's earnings have declined by 17.6% per year over the past 5 years.
Accelerating Growth: FRU's earnings growth over the past year (29.6%) exceeds its 5-year average (-17.6% per year).
Earnings vs Industry: FRU earnings growth over the past year (29.6%) exceeded the Oil and Gas industry -16.2%.
Return on Equity
High ROE: FRU's Return on Equity (0.5%) is considered low.
Next Steps
Financial Health
How is Freehold Royalties's financial position?
Financial Position Analysis
Short Term Liabilities: FRU's short term assets (CA$17.0M) exceed its short term liabilities (CA$15.8M).
Long Term Liabilities: FRU's short term assets (CA$17.0M) do not cover its long term liabilities (CA$110.7M).
Debt to Equity History and Analysis
Debt Level: FRU's debt to equity ratio (15.1%) is considered satisfactory.
Reducing Debt: FRU's debt to equity ratio has reduced from 47.5% to 15.1% over the past 5 years.
Debt Coverage: FRU's debt is well covered by operating cash flow (113.9%).
Interest Coverage: FRU's interest payments on its debt are well covered by EBIT (5.8x coverage).
Balance Sheet
Next Steps
Dividend
What is Freehold Royalties's current dividend yield, its reliability and sustainability?
4.80%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: FRU's dividend (4.8%) is higher than the bottom 25% of dividend payers in the Canadian market (1.86%).
High Dividend: FRU's dividend (4.8%) is low compared to the top 25% of dividend payers in the Canadian market (5.9%).
Stability and Growth of Payments
Stable Dividend: FRU's dividends per share have been stable in the past 10 years.
Growing Dividend: FRU's dividend payments have fallen over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its high payout ratio (2297.9%), FRU's dividend payments are not well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
4.3yrs
Average management tenure
CEO
Tom Mullane (59yo)
7.17yrs
Tenure
CA$492,151
Compensation
Mr. Thomas J. Mullane, also known as Tom, has been Chief Executive Officer and President of Rife Resources Ltd., since May 17, 2013. Mr. Mullane has been the Chief Executive Officer and President at Freeho ...
CEO Compensation Analysis
Compensation vs Market: Tom's total compensation ($USD361.39K) is below average for companies of similar size in the Canadian market ($USD1.05M).
Compensation vs Earnings: Tom's compensation has been consistent with company performance over the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 7.17yrs | CA$492.15k | 0.062% CA$266.0k | |
| VP of Finance & CFO | 0.58yr | CA$137.36k | 0.0042% CA$18.1k | |
| Chief Operating Officer | 1.33yrs | CA$347.29k | 0.022% CA$94.7k | |
| Vice-President of Asset Development | 1.33yrs | CA$297.94k | 0.013% CA$54.3k | |
| Manager of Investor Relations & Capital Markets | no data | no data | no data | |
| Corporate Secretary | 12.42yrs | no data | 0.0017% CA$7.3k | |
| Controller | 11.92yrs | no data | 0.0029% CA$12.4k | |
| Vice-President of Business Development | no data | no data | 0.0084% CA$36.3k |
4.3yrs
Average Tenure
Experienced Management: FRU's management team is considered experienced (4.3 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 7.17yrs | CA$492.15k | 0.062% CA$266.0k | |
| Independent Chairman of the Board | 4.17yrs | CA$180.00k | 0.11% CA$478.6k | |
| Independent Corporate Director | 8.17yrs | CA$145.00k | 0.021% CA$90.8k | |
| Independent Corporate Director | 5.17yrs | CA$130.00k | 0.013% CA$56.0k | |
| Independent Director | 7.17yrs | CA$137.50k | 0.017% CA$74.5k | |
| Non Independent Director | 24yrs | CA$55.00k | 0.023% CA$98.0k | |
| Independent Corporate Director | 6.17yrs | CA$140.00k | 0.011% CA$45.4k | |
| Independent Corporate Director | 4.17yrs | CA$130.00k | 0.0042% CA$18.1k |
6.7yrs
Average Tenure
63.5yo
Average Age
Experienced Board: FRU's board of directors are considered experienced (6.7 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: FRU insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Freehold Royalties Ltd.'s company bio, employee growth, exchange listings and data sources
Key Information
- Name: Freehold Royalties Ltd.
- Ticker: FRU
- Exchange: TSX
- Founded: 1996
- Industry: Oil and Gas Exploration and Production
- Sector: Energy
- Market Cap: CA$430.750m
- Shares outstanding: 118.66m
- Website: https://www.freeholdroyalties.com
Location
- Freehold Royalties Ltd.
- 517 – 10 Avenue SW
- Suite 1000
- Calgary
- Alberta
- T2R 0A8
- Canada
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| FRU | TSX (The Toronto Stock Exchange) | Yes | Common Shares | CA | CAD | Feb 1997 |
| FRHL.F | OTCPK (Pink Sheets LLC) | Yes | Common Shares | US | USD | Feb 1997 |
| 1FH | DB (Deutsche Boerse AG) | Yes | Common Shares | DE | EUR | Feb 1997 |
| 0UWL | LSE (London Stock Exchange) | Yes | Common Shares | GB | CAD | Feb 1997 |
Biography
Freehold Royalties Ltd., an oil and gas royalty company, owns working interests in oil, natural gas, and potash properties in Western Canada and the United States. The company holds approximately 6.8 million gross acres of land from northeastern British Columbia to southern Ontario. It has interests in approximately 44,000 wells and receives royalty from 300 industry operators. The company was founded in 1996 and is based in Calgary, Canada.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/07/15 23:54 |
| End of Day Share Price | 2020/07/15 00:00 |
| Earnings | 2020/03/31 |
| Annual Earnings | 2019/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.