To earn passive income through royalty income is for every budget. The following article gives an overview and a few
possibilities to gain income from royalties.
Royalties are defined as a payment made from one to somebody else (who owns an asset) in order to
get the right to use his asset. There is some kind of deviation: the common form of royalty interests,
meaning one pays for the right to get the future stream of royalty payments.
Royalties can come in from intangible assets like patents or franchises or from rights given to exploit
natural resources (oil and gas for example). Royalties are also common in the music or book industry.
Royalty stocks or trusts
There are certain companies listed at stock exchanges that get nearly all their income from royalty
Examples (these are not recommendations!):
Franco-Nevada Corporation (FNV.TO) – This is a Canadian company owning gold royalties and gold
royalty streams. This is quite a special business model within “gold stock”. However, it works fine.
The dividend yield is around 1 % (September 2019). Link to yahoo finance:
Freehold Royalties Ltd. (FRU.TO) – FRU is an oil and gas royalty company. The dividend yield is around 8
% (September 2019). Link to yahoo finance: https://finance.yahoo.com/quote/FRU.TO?p=FRU.TO
Alaris Royalty Corporation (AD.TO) – A Private Equity company that finances other companies in
exchange for royalties or distributions from the Private Company Partners. The dividend yield is around 8
% (September 2019) and dividends are paid monthly. Link to yahoo finance:
Pizza Pizza Royalty Corporation (PZA.TO) – This company gets its income from franchises (772 Pizza-
Restaurants). The dividend yield is around 8 – 9 % (September 2019) and dividends are paid monthly.
Link to yahoo finance: https://finance.yahoo.com/quote/PZA.TO?p=PZA.TO
Disclaimer: These are no recommendations. Please do your own research. Useful sites include
https://finance.yahoo.com, https://seekingalpha.com, https://thestockmarketnow.com. Disclosure: Of the mentioned
companies, I own stocks of Alaris Royalty Corporation.
These companies are just a few examples. There are many more. I especially recommend browsing dividend stocks of the Canadian Stock Exchanges. They very often offer monthly dividends.
In addition, royalty income streams can be bought on certain platforms. The largest and most
professional one is Royalty Exchange.
Royalty Exchange has always some offers on its website and works as an auction site. Royalty owners
normally sell there their royalty interest for a duration of 10 years or for a lifetime. There are
various kind of rights, whereof the royalty interest can be acquired. Starting prices vary very much,
lower ones begin at about USD 4’000. The latest development is that they have opened a marketplace
where you can buy or sell your bought royalty interests again. However, they take a 15 % commission
My experiences from buying myself some royalty interests show that Royalty Exchange is highly
professional in doing its business. Every step is executed digitally; so no need to do paperwork at
home. They guide you properly with e-mails through the whole process once you have won an
auction. My royalty interests come with the promised periodicity of (in my case) every quarter. You
get a very detailed royalty statement with every payment. Providing and archiving works through
Paymenthub, digitally, as well.