If you’re searching for reliable monthly income from a stock on the TSX, Freehold Royalties (TSX:FRU) deserves a spot on your radar. Freehold, a Canada-based oil and gas royalty company, has paid a monthly dividend for the last three decades, despite volatile commodity prices.
While the Canadian dividend stock cut its payout during the COVID-19 pandemic to $0.18 per share, it has since raised the annual dividend to $1.08 per share in 2026.
Freehold isn’t like most energy companies, given it owns royalty rights across some of North America’s best oil and gas regions. It collects a share of the revenue, without paying for drilling, equipment, or cleanup costs, allowing it to pay a dividend across market cycles.
Freehold went public in 1996 at $10 a share. Since then, it has returned more than $2.4 billion in dividends to shareholders, or $37 per share, according to remarks from Freehold chair Marvin Romanow at the company’s May 14, 2026 annual meeting.
Add that to the current share price, and the total value delivered comes to roughly $54 per share. Romanow noted that translates into a 12.5% annual compounded return over 30 years, driven by steady 4% annual production growth layered on top of a generous monthly dividend.
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The Canada dividend stock has a monthly payout
The current monthly dividend is $0.09 per share, or $1.08 annualized, indicating a yield of 6.7%. Given its funds from operations (FFO), Freehold ended 2025 with a 75% payout ratio.
Freehold’s official policy targets a payout ratio closer to 60% over time, with the board reviewing the dividend every quarter based on commodity prices, exchange rates, and production volumes.
CEO Dave Spyker stated that Freehold generated $235 million in funds from operations in 2025, even as oil and gas prices softened compared to the prior year.
Roughly half of that cash flow now comes from U.S. assets in the Permian Basin and Eagle Ford, two of the most productive oil regions in North America. Spyker said the company gets a 19% better oil price in the U.S. thanks to proximity to Gulf Coast markets, which helps support cash flow even when commodity prices are choppy.
More than 75% of the company’s revenue comes from large, well-capitalized operators like ExxonMobil, Occidental, and ConocoPhillips, according to Spyker. These companies tend to run steady drilling programs regardless of oil prices, which provides Freehold a more predictable production base than what smaller operators might offer.
Freehold has also been building what it calls a ground game in the U.S., quietly buying undeveloped mineral rights directly from landowners in the Permian Basin. Spyker said the company has invested about $60 million over the last 18 months, adding roughly 1,200 gross future drilling locations.
Spyker said the company is comfortable at its current level of 1.2 times debt-to-cash flow, with a longer-term goal of closer to 0.8 times. He also laid out the order of priorities for extra cash: dividends first, followed by acquisitions, debt repayment, and share buybacks.
Should you buy Freehold Royalties for the dividend?
Freehold checks a lot of boxes for income investors. A 6.7% yield paid monthly, three decades of uninterrupted payouts, low operating risk thanks to its royalty model, and growing exposure to premium U.S. oil basins all point to a company built for the long haul.
The board’s own commentary suggests confidence in continuing that streak, backed by a portfolio that management says is stocked with future drilling opportunities for years to come.
Alternatively, energy royalty income moves in line with commodity prices, which forced a dividend cut in 2020. But for investors who want steady monthly cash from a company with a proven track record, Freehold Royalties is worth a closer look.
