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10/29/25 Capitalist Times Live Chat

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Roger Conrad

5:29

Yes. The hydro unit sale would help cut debt. And management will be asked about it during the Q3 earnings call on Nov 7. But the current dividend rate is well supported by guidance for 2025-27. And at the mid-point of the 2027 range (44 cents), the payout ratio drops to just 59%--the threshold to resume increases. Management is under no pressure to sell the hydro unit to cut debt, as it was with the bigger renewable energy portfolio and Atlantica stake. They'll wait until they get an accretive deal.

Jon B

5:34

We don't hear too much about buildout of the AI datacenter complex in Canada. With power plants and nat gas pipelines, is TRP meaningfully leveraged to this? Any other catalysts on the horizon for TRP? And can they deal with their debt load?

Roger Conrad

5:34

TC Energy is pretty well positioned across North America to serve incremental demand for natural gas from AI-enabled data centers. That includes the epicenter--which is northern Virginia where its Columbia Gas system is dominant. I expect to hear more about that with Q3 results on November 7. As for data centers in Canada, it hasn't said too much about that yet--and LNG exports seems to be a bigger opportunity (Coastal GasLink etc). But they are the biggest player and I think we can count on them being the middle of whatever happens there. I think the primary catalyst for the stock is basic blocking and tackling--getting projects up and running on time and on budget. And since Coastal GasLink, they've been executing. I don't see debt as a major issue--though it shows up in various screens as high. The BBB+ rating ensures a low cost of debt. Still a buy at 50 or lower.

Tommy L

5:34

Roger, I am a long-time reader of CUI and CUI+, and want to thank you for your successful track record that benefits us, your readers. A few of the stocks in the CUI+ portfolio are in the red this year--AROW, LYB, MAA. Three very different sectors--any conclusion to draw regarding these sectors? Thank you.

Roger Conrad

5:43

This is answering Tommy's question on AROW, LYB and MAA. I guess the larger answer is that any given year some of your stocks are going to underperform--even while others are outperforming. AROW as a community bank that's faced the same headwinds as a stock as regional banks, despite continuing to report steady results. I expect the same in Q3 results, which are imminent. Mid-American reported generally solid Q3 results today at a time when investor sentiment on apartments is extremely bearish. The supply pressures did show up in the numbers, as they did in the first half of 2025. But the company saw improved blended lease rate growth that was actually positive. Ir reported record low turnover and moveouts. Occupancy was strong at 95.6%. Developments were successfully completed. And management raised the low point of 2025 guidance for core AFFO. The negative sentiment persists but results still show recovery and brighter times ahead.

5:44

As for LYB--I'm going to take my cues from Q3 results announced on Friday. I may recommend selling for a tax loss to offset gains elsewhere in the portfolio by the end of the year. But for now it's a hold.

Sohel

5:48

Hello Roger, Thanks for holding these chats ... very useful. Is BSM suitable for an IRA?

Roger Conrad

5:48

Hi Sohel. Black Stone Minerals is an MLP, so there will be K-!. But as I mentioned earlier in the chat, so long as total UBTI (unrelated business taxable income) across the portfolio is less than $1,000--which in practice is very hard to reach--there is no additional filing requirement or tax due. So like all MLPs, I think BSM is suitable for an IRA with that as a guideline.

The other caveat is that BSM is a natural gas weighted royalty trust--meaning nat gas prices are going to impact what it pays in dividends. That's both from realized prices for gas received for what's produced on its lands by third parties--and how much those third parties (Aethon is the largest) wind up producing, which is also affected by gas prices. So you need to be ready for volatility in the dividend and the shares--though we believe higher gas prices and production on its lands will multiply both going forward.

Sohel

5:54

Hello Roger, I see that you have recently added WES to your High Yield list. I've been asking you about WES for several months on these chats. What changed your mind? Also, what factors did consider to arrive at the buy under price of $40? I recall previously you had suggested $38-39 was too high and to wait for pull back. Thanks for all the helpful information over the past many years as a subscriber.

Roger Conrad

5:54

Thanks so much for those kind words. Yes I recall. What changed my mind to go a bit higher was two things. First, Occidental--the primary shareholder and customer--has apparently recommitted to developing production on the old Anadarko lands, which are still served by Western Midstream. OXY sold its Oxyfuels unit to Berkshire--and now that its debt is within its target range, I think it will ramp up a bit, which will benefit WES' system. Second, WES is now a major player in frac water in the Permian, which diversifies its cash flow considerably. The distribution coverage is still not as comfortable as say at EPD. And OXY having such a make or break role in WES' success are still concerns. But at a yield of 9.5% that's still growing, I think we're adequately compensated. And it's a great High Yield Energy pick.

Don R

5:58

I'm always looking to add dividend growers on the pullbacks. Reits are taking a hit. Should I pull the trigger on NNN and MAA. They are getting close to or at the dream buy levels. Also checking out NJR- any thoughts here. Thank you.

Roger Conrad

5:58

Hi Don. I think both of those stocks are pretty cheap just now--MAA especially following what was actually a pretty decent Q3 earnings report with a lot of green shoots for ultimate recovery. NNN reports on November 4.
All this is with the usual caveats about not overweighting or doubling down on a stock that's come down. And REITs in general still face headwinds from higher for longer borrowing costs--they haven't come down appreciably in this sector yet--and short-term over supply in some sectors. But both of these are high quality stocks. And this isn't 2020 for the property sector--the long-term supply picture is considerably more favorable.

Denisimo

6:03

Any thoughts on LYB ? Dividend cut forthcoming?

Roger Conrad

6:03

Hi Denis. I think we should have a pretty good idea about the dividend when Lyondell reports Q3 results and updates guidance on October 31. The headwinds are pretty obvious--still high borrowing costs and crimped margins in chemicals markets--Europe as well as North America. The key to what happens is likely to be how successful the cash flow plan has been--and the extent to which it offset pressure on free cash flow from the cyclical factors.
What we do know is the stock is pricing in a dividend cut of probably as much as 50% from the current level. So if that does happen and it's accompanied by a plan that puts the company on better long-term footing, we're not likely to see a lot of downside.
I may sell this stock to offset gains elsewhere in the CUI Plus/CT Income/Dividends Premium portfolio by the end of the year. But for now, it's a hold until we see those Q3 results later this week.

Sohel

6:09

Roger, What are your thoughts on PAGP? Quite interesting for it's yield. I see you have rated as Aggressive. Could grade the level of agressiveness - hi, med, low? Also what are the most important risks for this stock and what are the odds of those coming to fruition? Thanks again!

Roger Conrad

6:09

Good question. Plains announces Q3 results and updates guidance on Nov 5. And I expect to see some pressure on crude oil volumes from soft commodity prices--but nothing close to what we saw in 2015. And I think the company will also post cash flows that cover CAPEX and dividends with room to spare as it has repeatedly the past few years. In short, I think this is a far more resilient company than the one that crashed an burned on lower oil volumes in 2015--and didn't bottom until mid-2020.
I would rate it more aggressive than EPD or even ET. But again the 9% yield is more than enough to compensate the additional risk. And even on a dip to oil at $40 or lower, I don't see significant stress on operations--this is a larger company with more secure contracts and a lot less debt than in 2015.

BKNC

6:12

Curious of your thoughts on TU at this time? I am wondering on if it is time to add a little.

Roger Conrad

6:12

As I've said before, my view is averaging down in a falling stock is rarely if ever a good idea. The stock has given up much of the gains we had earlier this year--though it's still running well ahead of dividend cutter BCE.
Telus announces earnings on November 5. And I don't see anything that would make me doubt they'll affirm guidance with a solid Q3 result--with steady growth in 5G and fiber customers as well as the related businesses like Telus Health.

Fred Lind

6:19

Roger, I’ve been holding FAX for some time now. May have been one of your recommendations from years back. The yield is good and it’s in a retirement account. It’s under water by a good bit. Do you see any risk in continuing to hold it for the income? As always, thank you for your great pubs and advice!

Roger Conrad

6:19

Hi Fred. It is up a bit since late 2022, including about 16% year to date including the dividend. I think two things have basically happened to it over the years. First, the Australian dollar has weakened to about 65 US cents, though that's up from under 60 cents earlier this year. Second, management has been paying out more in annual income than it's earned in interest and dividends. That's common practice for this type of fund. And I suspect your losses are a lot less if you add in the income.
I don't see a lot of risk in holding this fund at this point. For one thing, credit quality is high. And I think the AUD will strengthen against the USD over the next few years--as it always does when commodity prices are in a long-term upcycle. I expect geopolitics have delayed a real surge. But it's nice to have some non-USD investments in a long-term account. And this one does pay a generous though variable yield.

Robert

6:27

What is your view of the MLP KNTX? It is tied into natural gas.

Roger Conrad

6:27

Hi Robert. We do track Kinetik Holdings in the "MLPs and Midstream" coverage universe in EIA. We currently rate the stock a hold ahead of Q3 results on November 5. The big news recently was its sale of its ownership interest in the EPIC crude oil pipeline in the Permian Basin to Plains All-American Pipeline on solid terms, which will free up cash to invest elsewhere. And we'll likely get an idea of where that will be in the guidance call next week. The yield is high--not covered by free cash flow, which makes asset sales more important to holding down debt and separates it in terms for risk from PAA for example. I'm not inclined to chase it when ET and others yield almost as much. But i will be interested in the Q3 result.

Jay

6:36

BE (Bloom Energy) has been a high flyer in the past year (energy for data centers), small fuel cells ??? for data centers. I dont think this in your coverage universe? Can you comment on similar companies you might be following that have the potential to follow a similar path.

Roger Conrad

6:36

Hi Jay. I think Bloom is finally seeing some positive economics of scale kick in--Q3 results announced this week highlights included a 540 basis point boost in margins on a 57.1% increase in sales. Operating swung positive from a loss. And the company set a $5 bil partnership to develop strategic AI infrastructure with Brookfield Asset Management.
There's still a GAAP loss and these results remain very dependent on order flow. So a disappointing quarter for orders could crush those economics. And the result would likely be a big drop in the stock.
I've historically shied away from other green energy stocks with no real earnings trading on hype--and that's saved a lot of heartache. Bloom is one I may pick up for coverage in CUI now that it's achieving some scale. But it operates in a very competitive industry and must continue to get orders--with less than no margin for error. I would rather own battery systems maker Fluence as a speculative bet--it's already had a big rise and fall, so far less hyped.

Michael L

6:40

Roger, thanks to you and Elliott for decades of profitable advice. LYB is going to report soon and the stock seems to be drifting lower, Do you think that's in anticipation of the Q3 print? Also, do you think the dividend will hold and what is your 12 month outlook for this stock?

Roger Conrad

6:40

Hi Michael. Yes, I think the consensus expectation for Lyondell is a dividend cut of about 50%. Whether they do that or not is going to depend on how well the cash flow optimization plan has worked--and to what extent it's offset the cyclical pressures on revenue in the chemicals business.
The plan has been working well. But so have cyclical pressures increased in North America and Europe. And to the extent there's a shortfall in guidance, management is going to have to decide if it can hold the current dividend rate until the cyclical downturn in its core business moves to the recovery stage. LYB isn't the same company as DOW, which cut by 50% in July. But that is the expectation. I'm comfortable holding at least through the earnings because the stock is already priced for that outcome--though as I've said several times during the chat, I may sell this one for a tax loss to offset gains later this year.

Fred Lind

6:46

Hi Roger, I have both BEP and BEPC. If I recall correctly, they spun out BEPC shares from BEP at BEPC’s introduction. You recently addressed the yield advantage in holding the partnership over the corporate shares. Seems reasonable to me to swap BEPC for BEP in a taxable account. Seems like it would make sense in a retirement account as well, but would welcome your opinion on that one. Thank you for hosting these chats. I always enjoy reading the transcripts and especially getting to participate!

Roger Conrad

6:46

BEP and BEPC represent the same ownership in Brookfield Renewable. The C-Corp shares were issued as effectively a stock dividend, so institutions that couldn't own MLP shares could own the company. I think the discount is ridiculously high. There's no assurance it will close, anytime soon or ever. But you do get more value buying BEP than BEPC now--as well as a much higher yield.

So far as taxes go, I don't know if taking a big tax hit to sell BEPC and buy BEP is really worth it. It would make sense in an IRA or other retirement account, as there would be no tax hit. And getting to $1,000 in unrelated taxable income--the threshold for any additional tax or filing requirement--is highly unlikely.

Great question.

Sal

6:51

Any thoughts on OKE it has been dropping in price for just about a year now .

Roger Conrad

6:51

Hi Sal. As I indicated earlier in the chat, I think ONEOK had a pretty solid Q3 result today. And investment plans are proceeding well, with a focus on natural gas for power generation and LNG exports. Management even mentioned opportunities to serve data centers.
Investors are still concerned about commodity price exposure, mainly NGL spreads. And seemed to be some concern on the call that management qualified 2026 guidance due to customers' plans. But the bearish sentiment seems like it's far more due to bearish forecasts for oil prices--with an eye on how the then much smaller and financially weaker ONEOK was impacted--rather than anything to do with actual results. Still like ONEOK at 80 or lower.

Michael L

7:03

You just mentioned that you may sell LYB for a tax loss, depending on the Q3 print. I've noticed that your position on this stock has continued to decline as we get closer to Friday. Previously you were saying we may have to hold through a dividend cut but expected the stock to hit triple digits within 12-18 months. There has been no news in the interim that I'm aware of. So what gives?

Roger Conrad

7:03

I still think the stock will double or triple eventually. I think the long-term investment plan at LYB is sound and the company's fortunes will greatly improve when cyclical headwinds become tailwinds. I like the focus on more sustainable businesses like greener plastics, which should command higher margins over time and are more in tune with what regulators and public wants.

The challenge for LYB right now is those headwinds--which I think it's fair to say have been a little more intense than most of us expected. And it looks like it may take a little while longer to overcome them than management expected.

So yes, I want to be up front that I may sell this position for a tax loss--possibly to buy it back in 30 days, possibly not. It is a potential opportunity in this portfolio to shelter gains. And the same will be true for anyone following the portfolio.

What I decide to do is going to depend on what the company has to report and what it has to say--which in fact is how I evaluate every company.

Guest

7:07

Roger,I have followed your advice buying VG and PR in 1/3 batches. But is mow agood time to buy the last group?

Roger Conrad

7:07

Yes. You might consider waiting until they release earnings. Permian will do so on Nov 5 and Venture on Nov 10. That will avoid the possibility of a nasty surprise--I doubt we'll see one but it's always possible and you may get a better entry point by waiting until then. Also, given the heavy level of bearishness in the energy sector now, the risk of the stocks rising sharply following the numbers is low. If you choose this route, we will have an earnings related issue of EIA going out mid-November. Or you can drop us a line at service@capitalisttimes.com before that.

Frank

7:08

Realty Income vs Agree Realty. Both strong. Which one do you favor?

Roger Conrad

7:08

Realty Income (NYSE: O) is on my "First Rate REIT" list, so that's the one I favor. Earnings are out November 3.

7:21

Would like to thank you on the recommendation of BEP in the past few months have been loading up on it due to the writeup you gave it regarding Westinghouse. Its now close to 1% of my portfolio (which for me is considered a large holding). As you noted, there is a big difference in the trading price between the MPL and the BEPC shares. Do any MPLs offer a convertible option between these types of shares that would help to equalize the prices.

Roger Conrad

7:21

Hi DJ. I'm very happy you've been able to take advantage of the Brookfield recommendation. Eventually, enough investors notice this kind of news to make a difference, though it sometimes takes a while.
Regrettably there's no conversion option from the MLP units to the C-Corp--and I'm not aware of any in the MLP universe. The challenge for offering one is unless successfully structured, the partnership unitholders would likely owe taxes from accumulated return on capital dividends. That would include Brookfield Asset Management, the lead owner. A mechanism that gave investors an option (not mandatory) to switch could get around that and would likely narrow the share price gap. I wouldn't rule one out being adopted for BEP or anywhere. But at this point, there isn't one.

Thanks for that question.

Denisimo

7:32

Do you think PAGP will maintain it's high dividend over the next year or two?

Roger Conrad

7:32

I think Plains will actually increase the dividend in January, though probably at a 3-5% rate rather than the high teens percentage rate of the past few years.

Q3 results are due out November 7. And as I've indicated earlier in the chat, I think numbers and guidance will solidly support the dividend, balance sheet and investment plan. Plains is a far different company than it was in 2015 when weaker oil prices hit system volumes and forced a progression of dividend cuts. And less debt, more secure contracts and better scale of assets should assure resilience--even if oil prices drop further.

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