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Written by Summary Source Rock Royalties is a nano-cap oil royalty company. About 40% of the market cap is backed by a net cash and working capital position and this is increasing every quarter. The current dividend yield of 7.9% represents a payout ratio of less than 60% based on the Q1 results. The net cash position provides a bonus: As interest rates are increasing, the net cash could actually generate a substantial positive interest income. Looking for more investing ideas like this one? Get them exclusively at European Small-Cap Ideas. Learn More » Mustapha GUNNOUNI/iStock via Getty Images Introduction One of the easiest ways to gain exposure to oil prices is buying oil royalty companies. I have discussed several of the larger oil royalty companies here on Seeking Alpha before but in this article I wanted to explain my thesis for Source Rock Royalties (TSXV: SRR:CA ), a nano-cap royalty company which completed its IPO in the first quarter of this year. Source Rock combines a positive free cash flow with a very attractive dividend and an even more attractive net cash position. SRR data by YCharts Source Rock Royalties has its main listing in Canada where it’s […]
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