TSX:FRU

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Freehold Royalties

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.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.1%

FRU

-1.6%

CA Oil and Gas

0.3%

CA Market


1 Year Return

-59.9%

FRU

-32.2%

CA Oil and Gas

-12.5%

CA Market

Return vs Industry: FRU underperformed the Canadian Oil and Gas industry which returned -32.2% over the past year.

Return vs Market: FRU underperformed the Canadian Market which returned -12.5% over the past year.


Shareholder returns

FRUIndustryMarket
7 Day-3.1%-1.6%0.3%
30 Day-22.3%-13.2%-3.0%
90 Day-9.3%5.1%9.7%
1 Year-56.1%-59.9%-28.5%-32.2%-9.5%-12.5%
3 Year-68.5%-74.3%-28.0%-36.8%3.2%-6.6%
5 Year-67.0%-75.9%-32.8%-44.2%20.2%2.0%

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

Valuation

Is Freehold Royalties undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FRU (CA$3.41) is trading below our estimate of fair value (CA$6.91)

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 (124.4x) compared to the Oil and Gas industry average (10.6x).

PE vs Market: FRU is poor value based on its PE Ratio (124.4x) compared to the Canadian market (13.2x).


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 (0.6x) 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?

5.28%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FRU's dividend (5.28%) is higher than the bottom 25% of dividend payers in the Canadian market (1.89%).

High Dividend: FRU's dividend (5.28%) is low compared to the top 25% of dividend payers in the Canadian market (6.05%).


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 ($USD362.50K) is below average for companies of similar size in the Canadian market ($USD1.05M).

Compensation vs Earnings: Tom's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Mullane
President7.17yrsCA$492.15k0.062% CA$261.6k
David Hendry
VP of Finance & CFO0.58yrCA$137.36k0.0042% CA$17.8k
David Spyker
Chief Operating Officer1.33yrsCA$347.29k0.022% CA$93.2k
Robert Lamond
Vice-President of Asset Development1.33yrsCA$297.94k0.013% CA$53.4k
Matt Donohue
Manager of Investor Relations & Capital Marketsno datano datano data
Karen Taylor
Corporate Secretary12.42yrsno data0.0017% CA$7.2k
Michael Mogan
Controller11.92yrsno data0.0029% CA$12.2k
Robert King
Vice-President of Business Developmentno datano data0.0084% CA$35.7k

4.3yrs

Average Tenure

Experienced Management: FRU's management team is considered experienced (4.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Thomas Mullane
President7.17yrsCA$492.15k0.062% CA$261.6k
Marvin Romanow
Independent Chairman of the Board4.17yrsCA$180.00k0.11% CA$470.7k
Arthur Korpach
Independent Corporate Director8.17yrsCA$145.00k0.021% CA$89.3k
Gary Bugeaud
Independent Corporate Director5.17yrsCA$130.00k0.013% CA$55.0k
Aidan Walsh
Independent Director7.17yrsCA$137.50k0.017% CA$73.2k
Peter Harrison
Non Independent Director24yrsCA$55.00k0.023% CA$96.4k
Susan MacKenzie
Independent Corporate Director6.17yrsCA$140.00k0.011% CA$44.6k
J. Kay
Independent Corporate Director4.17yrsCA$130.00k0.0042% CA$17.8k

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$423.630m
  • 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

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FRUTSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 1997
FRHL.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDFeb 1997
1FHDB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 1997
0UWLLSE (London Stock Exchange)YesCommon SharesGBCADFeb 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

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/08 23:56
End of Day Share Price2020/07/08 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.