Freehold Royalties (TSX:FRU) is a Calgary-based company that seeks to acquire and manage Oil and Gas royalties. Shares of Freehold have climbed 5.5% in 2019 as of close on May 9.
The stock is down 31% from the prior-year.
A lot has gone right for the energy sector in 2019. Oil prices have rallied nicely after a scare to finish off the previous year. Alberta faced a legitimate crisis in late 2018 due to oil price differentials between U.S. and Canadian crude, but production cuts have managed to mitigate the harm.
Freehold released its first-quarter results on May 7. Royalty and other revenue fell 9% year-over-year to $35.6 million and funds from operations also dropped 9% to $29.3 million. Despite the retreat in revenue,
Freehold generated enough funds to comfortably cover its dividend payments. It also allowed the company to pay down $12 million in net debt. Freehold boasts a strong balance sheet which should support income for shareholders into the next decade.
Royal production averaged 10,139 boe/d, which came in above the middle of its 2019 production guidance. This was with weather and lower additions from its audit function weighing on volumes.
Freehold stock climbed 1.15% on May 9. In the first quarter the company declared a monthly dividend of $0.0525 per share.
This represents an attractive 7.1% yield. The Canadian energy sector has climbed out of a troublesome period. Freehold is one of the steadiest options available for income investors chasing high yields.
