The S&P/TSX Composite Index finished Wednesdayâs trading session within the red. High rates of interest have continued to place pressure on investors. Today, I need to zero in on a worth stock that’s price targeting on this environment. Freehold Royalties (TSX:FRU) is a Calgary-based oil and gas royalty company that owns working interests in oil, natural gas, natural gas liquids, and potash properties in Western Canada and the USA. Investors also can churn out passive income from this low cost stock. Letâs jump in!
How has this value stock performed over the past yr?
Shares of Freehold Royalties have climbed 18% yr over yr as of close on February 8. The stock has increased 4.7% to this point in 2023. Silly readers who want more details can play with the interactive price chart below.
Hereâs why Freehold Royalties is one among my favourite passive-income targets
Freehold Royalties is exclusive in its commitment to rewarding its shareholders with consistent passive income. It has maintained a powerful balance sheet and money flow that support its dividends. Indeed, Freehold Royalties has some of the impressive track records within the energy space.
On January 16, the corporate published its sustainability report. This company stays focused on delivering for its shareholders while also meeting the green energy targets which might be bearing down on the sector. Investors should be ok with Freehold Royalties for the long run.
Should investors be comfortable with its recent earnings?
Investors can expect to see this companyâs final batch of fiscal 2022 earnings at first of March. Within the third quarter (Q3) of 2022, Freehold Royalties reported funds from operations (FFO) of $80.8 million, or $0.54 per share — up 68% from the previous yr. Meanwhile, this keeps up nicely with its dividend payout, which should maintain shareholder confidence going forward.
The corporate reported 304 gross wells drilled on its lands. That brings the primary nine months of 2022 to 764 total gross wells. This positions Freehold Royalties for a record-breaking yr. Meanwhile, total production increased 26% yr over yr to 14,219 barrels of oil equivalent per day (boe/d) in Q3 fiscal 2022. It achieved a realized price of $74.31/boe in Q3 2022 on a company measure. That’s up 51% from the prior yr.
Freehold also provided guidance for the rest of 2022. It forecasts average production (boe/d) between 13,750 and 14,750. Meanwhile, the corporate projects FFO between $300 million and $320 million.
Freehold Royalties: Why Iâm buying this value stock today
Freehold Royalties announced a monthly dividend of $0.09 per share on January 12, to be paid on February 15, 2023. That represents a tasty 6.8% yield. Investors needs to be pleased with this type of passive income, especially considering the consistency Freehold has offered.
What makes Freehold Royalties a worth stock? Its shares currently possess a price-to-earnings ratio of 11. That puts this energy stock in favourable value territory, especially in comparison with the vast majority of its industry peers.
The post This Value Stock Offers Huge Passive Income in 2023 appeared first on The Motley Idiot Canada.
Should You Invest $1,000 In Freehold Royalties Ltd.?
Before you think about Freehold Royalties Ltd., you’ll wish to hear this.
Our market-beating analyst team just revealed what they consider are the 5 best stocks for investors to purchase in January 2023… and Freehold Royalties Ltd. wasn’t on the list.
The net investing service they’ve run for nearly a decade, Motley Idiot Stock Advisor Canada, is thrashing the TSX by 16 percentage points. And immediately, they think there are 5 stocks which might be higher buys.
See the 5 Stocks
* Returns as of 1/9/23
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Idiot contributor Ambrose O’Callaghan has no position in any of the stocks mentioned. The Motley Idiot recommends Freehold Royalties. The Motley Idiot has a disclosure policy.