Dividends can really feel like fixed money once they pay you to remain affected person. When a dividend inventory or sector goes via a tough patch, a gentle dividend can take the sting off the wait and provide help to maintain investing as an alternative of panicking. In a Tax-Free Financial savings Account (TFSA), that money can really feel much more highly effective as a result of you’ll be able to reinvest it with out tax drag and let compounding do the heavy lifting. The important thing, although, is that “fixed money” solely works when the payout suits the corporate’s money stream.
Supply: Getty Pictures
FRU
Freehold Royalties (TSX: MRS) just isn’t a conventional oil producer. It collects royalties from power manufacturing on lands the place different operators do the drilling. That construction could make it really feel calmer than an exploration firm because it doesn’t usually carry the identical working and capital prices. The royalty agency can profit when exercise will increase on its royalty lands, and it could actually unfold danger throughout a large set of operators and areas.
During the last yr, the massive theme has been regular execution and staying constant on the month-to-month dividend. The dividend inventory has stored the dividend at $0.09 per share per thirty days, or $1.08 yearly, and continued to place itself as a predictable revenue identify within the power area. It additionally talked about capital self-discipline in plain phrases, together with a long-run goal dividend payout ratio of about 60% and a deal with holding web debt beneath about 1.5 occasions funds from operations.
The dividend inventory additionally had just a few company-specific gadgets that traders seen. It reported stronger manufacturing tendencies and a liquids-heavy combine, and liquids usually drive greater royalty income than gasoline in lots of pricing environments. It additionally had a senior administration change late in 2025, with the departure of its chief working officer, which traders have a tendency to observe carefully even when the broader enterprise stays secure.
Earnings help
The newest full quarter confirmed why the “fixed money” narrative nonetheless holds. Within the third quarter of 2025, Freehold reported income of $74 million and funds from operations of $58.9 million, or $0.36 per share. It paid dividends of $44.3 million within the quarter, which labored out to $0.27 per share, and it reported a dividend payout ratio of 75% for the quarter.
Operationally, it additionally reported whole manufacturing of 16,054 barrels of oil equal per day (boe/d) in that quarter, up 10% yr over yr, with a 65% liquids weighting. That element suggests the royalty base is not only amassing cheques from legacy manufacturing. It additionally advantages from improvement exercise and a combination that may help stronger money technology.
Trying forward, the trail for Freehold stays fairly intuitive. If drilling stays lively, royalty volumes stay resilient. If oil and gasoline costs are up, more money might be thrown to the royalty base. In the meantime, the dividend inventory trades at 22 occasions earnings with a 6.2% dividend yield. That’s the sort of yield that may really feel “fixed” in a TFSA, bringing in ample revenue with even $7,000.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| FRU | $17.53 | 399 | $1.08 | $430.92 | Month-to-month | $6,994.47 |
Backside line
Freehold can appear like an excellent TFSA money inventory as a result of it pays month-to-month. It has a royalty mannequin that may be much less capital-intensive than a producer, and up to date outcomes confirmed strong funds from operations relative to the dividend. However it isn’t a sleep-at-night bond substitute. It nonetheless relies on commodity costs and third-party drilling, and the payout ratio can run above its said goal at occasions. If you need month-to-month revenue with power publicity and you’ll deal with the cycle, FRU can match the “fixed money” transient in a TFSA, particularly for those who deal with sustainability and endurance as an alternative of anticipating perfection each quarter.