2024-03-06 10:30:00 ET
Summary
- Freehold Royalties has seen success as a low-risk speculation on increasing oil prices during the COVID-19 pandemic.
- The company's cash flows are closely correlated to the oil and gas price, with weak natural gas prices impacting overall revenue.
- Despite this, the company's dividend is safe, even at lower oil prices, and its strong cash flows make it an attractive investment opportunity.
Introduction
Sometimes the best investments are the companies you don’t need to follow up on that frequently. During the COVID-pandemic I started buying Freehold Royalties ( FRU:CA ) ( OTCPK:FRHLF ) as a low-risk speculation on an increasing oil price as an owner of royalties in Canada and the US. This has worked out very well (although I traded in and out during 2020 and 2021 before establishing a long-term position) and the company’s generous dividend still has a payout ratio that’s low enough to allow it to pursue additional acquisitions....
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For further details see:
Freehold Royalties: A 7.9% Dividend Yield At A 68% Payout Ratio