Martin DaviesFreehold Royalties LtdFRU.TOCOMMENTJul 23, 2015

His preference in the space. A bit less cyclical to commodity prices, as they get royalty payments more on production than on commodity prices. Yield is pretty high, almost 8%. See his Top Picks.

Lower beta way to get exposure to oil and nat gas. Conservative. Attempting M&A in US, but balance sheets are so strong, fewer companies need royalty deals to raise cash. Strong organic growth prospects next year. Yield is 7.5%, payout ratio at low 60% range. Trades at 8.5x, compared to the unjustified 14x for PSK.

Does not own shares, but follows company closely. Very high exposure to energy prices. Excellent company for dividend investors. Prefers companies like CNQ with capital appreciation. 

FRU is such a low-cost producer, it hasn't benefited as much as marginal producers have in the uptick in oil/gas prices. So its margins haven't increased as much. FRU asset package is so good, he's happy to own it despite this year's price action. He likes both names.

Excellent company that owns shares in company. Strong commodity prices. Expecting strong Q3 results. Very good management team. No wellbore liability risk. Diverse asset base across North America. Current share price a good place to buy. Strong long term investment. 

Excellent company with safe dividend.
Conservative balance sheet with strong management team.
~7% dividend yield.
Owns shares in company.
Expecting share upside. 
Trading at discount to PrairieSky Royalty.
Company needs to prove that they can acquire assets. 

Super cheap. As a royalty company, rock-bottom production costs. Only costs are running the office, which comes to about $5 a barrel. They make money in every environment. Yield is 7.53%, which is about 60% of free cashflow.

High quality, relatively safe dividend. Energy prices should remain firm, and FRU will benefit. Oil usage at all-time high, have to rebuild US reserves. Prefers CNQ and TOU for growth, though dividends are not as high. Yield is 7.5%.

Looks to be on a downslide. Consolidating, so probably won't go much lower. Buy a bit, hoping for a breakout to the upside. If drops below $13, will probably be more sellers than buyers, so be careful. Yield is a decent 7.8%. 

Excellent business model that is asset light (does not own wellbore liabilities).
No exploration risk.
Safe dividend - good for defensive investors.
Does not own shares at the moment.
5-10 year time horizon is a good investment.

Good to hold 5 years or longer, but it depends on commodity (oil) prices. He's bullish oil long term, because there's a lack of investment in oil globally. It can pay 7.6% dividend for a while. Their royalty structure means they are capital-lite and not investment much.

Likes the dividend. Less risky than some smaller plays. Be patient. He doesn't believe we're going to be using less energy in 5-10 years. Exit from fossil fuels is a 3-5 decade process. 

A solid pick over some of the other Canadian royalty names. He wants more risk now, as that's where the opportunities are. He wants names that have sold off aggressively, with a good dividend and a bias to grow that. He wants more leverage to a more bullish oil price. See his Top Picks.

Fine. Has asset growth, but you're paying a premium on royalty companies, so he prefers the producers like CPG or Baytex.

He likes natural gas producers now, with commodity prices depressed by temporary factors, but won't effect the western Canadian producers which will benefit to export pricing. Likes FRU long term with less risk than an outright producer. Pays a 7% dividend yield.