Monthly Dividend Stock In Focus: Source Rock Royalties

Published on February 26th, 2026 by Bob Ciura

Monthly dividend stocks have instant appeal for many income investors. Stocks that pay their dividends each month offer more frequent payouts than traditional quarterly or semi-annual dividend payers.

For this reason, we created a full list of over 100 monthly dividend stocks.

You can download our full Excel spreadsheet of all monthly dividend stocks (along with metrics that matter like dividend yields and payout ratios) by clicking on the link below:

Monthly Dividend Stock In Focus: Source Rock Royalties

Source Rock Royalties, Ltd. (SRRRF) is a monthly dividend stock with a high yield. This potentially makes the stock more attractive for income investors looking for more frequent dividend payouts.

This article will analyze Source Rock Royalties in greater detail.

Business Overview

Source Rock Royalties, is a pure-play oil and gas royalty company focused on acquiring high-netback interests across the Western Canadian Sedimentary Basin.

Operating a capital-light, non-operating model, the company generates top-line revenue through Gross Overriding Royalties (GORR), which are contractual slices of production from third-party working interests, and Fee Title mineral interests, which are leased to operators for lessor royalties and signing bonuses.

Source Rock’s portfolio is heavily weighted (about 95%) toward light and heavy oil production in southeast Saskatchewan and Alberta’s Clearwater play, with assets operated by partners like Whitecap Resources and Rubellite Energy.

The company reports its financials in CAD. All figures in this report have been converted to USD unless otherwise noted. Source Rock has a market cap of just ~$30 million and pays dividends on a monthly basis.

It was founded in 2012 and headquartered in Calgary, Canada. On December 1st, 2025, Source Rock reported its Q3 results for the period ending September 30th, 2025.

Royalty revenue declined 25% year over year to $1.1 million, reflecting a 12% decrease in average daily production and a 14% decline in realized oil prices.

Adjusted EBITDA fell 21% year over year to $1.0 million, or $0.02 per share, while FFO fell 13% to $0.9 million, or $0.02 per share, as lower commodity pricing more than offset reductions in administrative expenses.

Net income grew year over year, with total comprehensive income of $0.3 million, translating to $0.01 per share, supported by lower depletion and share-based compensation costs.

Growth Prospects

Source Rock’s history in the public market is very short, yet very volatile due to the extreme fluctuations in global crude prices.

The ($0.08) loss in 2020 was the result of the COVID-19 pandemic, which caused a collapse in benchmark prices and forced many of the company’s operators in the Western Canadian Sedimentary Basin to shut production.

This led to a significant drop in royalty revenue and non-cash impairment charges on their asset base.

The break even results in 2021 and subsequent rise in 2022 was fueled by the post-pandemic price rally and the company’s March 2022 IPO, which provided the capital to acquire high-netback assets in the Alberta Clearwater and southeast Saskatchewan Frobisher plays just as prices were peaking.

From 2023 ($0.03) to 2024 ($0.02), the company achieved record-breaking operational success, but EPS moderated due to accounting and tax headwinds.

In 2024, Source Rock hit a record annual production of 251 boe/d (a 21% increase over 2023) and record revenue of $7.68 million.

However, the bottom-line EPS was weighed down by significantly higher depletion charges (as they produced more from their expanded asset base) and a transition into a higher cash tax bracket.

Furthermore, while production volumes hit all-time highs due to 43 new wells coming online in 2024, average realized prices softened slightly (decreasing from approximately $87/boe to $83/boe), which compressed the high-margin gains seen during the 2022 price spike.

Moving forward, we don’t forecast either growth or decline in EPS due to the inherent lack of control over third-party drilling timelines and the company’s strategic decision to remain 100% un-hedged against commodity price swings.

Dividend & Valuation Analysis

The dividend is currently covered by funds from operations (C$6 million last year vs. C$3.5 million in dividends paid). However, it exceeds EPS, which might prove a problem long term, especially if oil prices decline while reserves gradually deplete.

Source Rock appears expensive on a P/E basis, because high non-cash depletion charges, accounting for the “using up” of oil reserves, heavily suppress net income.

Valuing the company long term via its EPS makes sense given it is critical for gauging sustainability, as it verifies that the company is truly profitable after accounting for the cost of replacing the finite oil it produces.

We believe the company should trade at more modest levels, and at higher yield to compensate for the underlying risks involved.

With a P/E of 23.0, SRRRF trades above our fair value P/E estimate of 20. Therefore, a declining valuation multiple could reduce annual returns by 6.2% per year.

Including no expected EPS growth and the 8.7% dividend yield, total expected returns are 3.0% per year over the next five years.

Final Thoughts

Source Rock Royalties is a high-margin, debt-free company that offers pure-play oil exposure and a high-yield monthly dividend, but it is best suited for investors are highly familiar with the sector and ready to navigate the inherent volatility.

We forecast annualized returns of 3.0% over the medium term as returns from the dividend could be offset by valuation headwinds. We rate the stock a hold, but cautious that the underlying business fundamentals of the company are speculative.