Oil Is Weak: 1 Canadian Dividend Inventory I’d Purchase Anyway

Oil appears to be like weak proper now. The market retains coming again to the identical fear: an excessive amount of provide for demand. Forecasters have warned that 2026 may face ample manufacturing development whereas demand development stays mushy, which caps rallies quick. The Group of Petroleum Exporting Nations (OPEC+) has even paused some deliberate will increase to keep away from a glut, and merchants hold flipping between softer financial knowledge and geopolitical noise with out committing to the next value development.

FRU

That’s why Freehold Royalties (TSX: MRS) can shine even when oil feels flimsy. It doesn’t drill. It owns royalty pursuits throughout Canada and the USA and collects a slice of manufacturing income from operators. Operators fund the capital spending, whereas Freehold focuses on stacking high-quality land, holding prices lean, and sending money again to shareholders. It additionally spreads danger throughout many wells and operators. In a uneven tape, that “paid to attend” construction can really feel calming.

Current information over the past 12 months has largely been about execution and self-discipline, not flashy guarantees. The dividend inventory stored leaning into U.S. publicity, particularly the Permian, as a result of it tends to draw capital even when budgets tighten elsewhere. It additionally continued to make use of acquisitions, however in a measured approach, aiming to enhance the long-term royalty base slightly than swing for the fences. That issues in 2026, as a result of one of the best royalty enterprise wins by compounding quietly.

The opposite headline-friendly level is the dividend. Freehold pays month-to-month, which buyers love when markets chop sideways. That additionally places strain on administration to maintain the payout aligned with money move, as a result of a month-to-month dividend inventory makes any mismatch present up shortly. In different phrases, it forces honesty. If commodity costs sag, you watch payout protection and debt, not simply the yield.

Earnings assist

Now the numbers, as a result of that is the place the “purchase anyway” case both holds up or falls aside. Within the third quarter of 2025, Freehold reported $74 million in income and $59 million in funds from operations, or $0.36 per share. It paid $44 million in dividends within the quarter, or $0.27 per share. Manufacturing averaged 16,054 barrels of oil equal per day (boe/d), up 10% from the prior 12 months, with liquids weighting at 65%.

These figures inform a clear story. The dividend inventory generated significant money move, it grew manufacturing, and it didn’t have to outspend to do it. The dividend didn’t eat the entire pie, both. Administration additionally highlighted that it lowered long-term debt and nonetheless invested in acquisitions, which alerts it stored a number of levers out there. In an oil market that may punish leverage, that flexibility issues.

Trying forwardthe setup for 2026 comes down to 3 issues: commodity costs, operator exercise on its lands, and capital allocation. If oil stays weak, Freehold can nonetheless maintain up higher than many producers as a result of it avoids direct working prices and huge capex payments. If oil rebounds, it participates without having to rebuild a drilling funds. The danger is {that a} extended downturn slows drilling sufficient to strain royalty volumes.

Backside line

So may this dividend inventory be a purchase for others? It might probably, in order for you power publicity with fewer sleepless nights and you want getting paid month-to-month when you await the cycle to show. Plus, it affords that month-to-month dividend at a 6.5% yield, so even $7,000 can create ample earnings.

The royalty mannequin helps, and the latest cash-flow numbers assist the dividend at this time. But it surely’s not magic. If oil stays weak for longer than anticipated, protection can tighten and sentiment can bitter. Purchase it for resilient construction and disciplined administration, not since you assume oil has to bounce subsequent week.