JotCast | 12/30/21 Capitalist Times Investing Live Chat

Return to

12/30/21 Capitalist Times Investing Live Chat

powered by

Prev Page View Full Chat Next Page

Clint

5:43

I have EPD as my primary "safe" MLP. I'm looking to add a position in a more aggressive MLP with hopefully higher income and capital appreciation potential later in the cycle. I'm looking at Energy Transfer and Plains. I would appreciate your thoughts on these two or another MLP.

Roger Conrad

5:43

Hi Clint. We are in the process of putting together a more portfolio-focused issue of Energy and Income Advisor to pair with the commodity price update Elliott just wrote and we posted as an Alert for readers earlier this week. That will include our six top energy stocks for 2022--which I can tell you will include 3 midstream focused companies. Enterprise and the more volumes sensitive Energy Transfer and Plains are very cheap stocks and the underlying businesses have adapted to the current low volumes environment. I think this is a good time to add to all three. But again, I will have 3 additional midstream picks for you in the upcoming EIA issue.

Guest

5:47

What are your opinions on AR and BSRTF? Both seem interesting for the volatile part of a portfolio.

Roger Conrad

5:47

Antero is a natural gas producer and so has benefitted from the increase in gas prices this year--though the exact amount has been muted by the company's aggressive price hedging. My view is this company is best off merged with a neighbor, with EQT Corp (NYSE: EQT) the obvious possibility. But at this point, our view is you're probably better off with another player. We track Antero and Antero Midstream in our E&P and MLPs/Midstream coverage universes, respectively, which can be accessed on the EIA website.

As for BSR REIT, it's not one I currently cover in the REIT Sheet, though I will take a look. At this time, my preferred pick in the Canadian multi-family space is still Canadian Apartment.

Jeff

5:49

How do you feel the mid streams will do this year and which ones do you like the best? I own EPD, ENB, ET and HESM

Roger Conrad

5:49

Hi Jeff. I've answered quite a number of questions about my outlook for midstream--so I won't repeat my earlier answers other than to say we like all of these stocks. All of their dividends are safe, their balance sheets are strong and they're all in line for big gains when volumes to recover to a level that's more normal for this stage of the energy price cycle.

bob

5:53

Hi Elliott & Roger. I have followed your advice for years & has been very profitable. Thank You! Is it possible for 'the Reit Sheet' to get its own website? Maybe, expanded coverage & more updates? I do understand there is a lot to keep up with your publications but it doesn't hurt to ask. You guys give very sound advice.

Roger Conrad

5:53

Hi Bob. I am expanding the REIT Sheet coverage universe slowly but surely by adding more names, many from suggestions offered by members--so please do feel free to pitch a few names to me when you can. Just drop an email at service@capitalisttimes.com.

The full REIT Sheet with its coverage universe is published every three months, which corresponds with when companies release their quarterly earnings--and which are a key part of my analysis. But I do send out updates the other two months, including advice on what to do with recommendations and other key developments I think are worth bringing to your attention.

I believe we are going to post past issues and the coverage universe going forward, probably using the CT website. In any case, thanks for your suggestions and your confidence in us.

Guest

5:57

Hi Roger and Happy New Year ... what on earth is going on with ET? It just seems to be getting weaker and weaker. Is it time to bail? And, AT&T ... should we still be holding this?????

Roger Conrad

5:57

I've answered quite a few questions on why midstream companies have been weak in Q4--which basically boils down to investor disappointment with the outlook for volumes that ultimately drive revenue and cash flow growth and remain at depressed levels for this cycle. Energy Transfer LP is no different than any other midstream company in that regard. But again, the important thing here is to have patience--they've adapted to the low volumes environment as a business which means the dividend is safe. And when we do get that volumes recovery, I think ET easily doubles from here.

As for AT&T, I'm rating it a hold presently as I believe the sum of the parts post Warner spinoff will be worth considerably more than the current price. The spin is still likely to take place in Q1 2022--so we most likely won't have to wait a lot longer to see if I'm right. But for fresh money, Verizon, BCE and Comcast are much better buys now.

Guest

5:59

Oh ... and Roger .. could you please make the REIT sheet downloadable? I keep losing the headings and having to scroll up to see them. It's most annoying. Thank you

Roger Conrad

5:59

Thanks for your interest and your suggestion. We'll see what we can do.

Ron

6:04

EPD MPLX ET OKE. Very title or no dividend growth for the last 2 years. How about 2022?

Roger Conrad

6:04

Hi Ron. Considering what happened to the North American energy sector the last couple years, any dividend increase at all has been a sign of real resilience. MPLX has only recently resumed payout growth--in addition to a special cash dividend--which is a real sign it has turned the corner as well. Again, for midstream share price gains and more robust dividend growth really do boil down to getting that volumes recovery. But my view remains that we will see it if we're patient. By the way, ONEOK has returned better than 62% year to date, ET 42%, MPLX 50% and even EPD 20% this year--pretty good returns even if dividend growth has been held back.

Howard F

6:05

Hi Roger and Happy and Healthy New Year

Roger Conrad

6:05

Thank you Howard. The same to you!

Howard F

6:10

I am at big time loses on mmp et tbs what is your advice sell or hold

Roger Conrad

6:10

I'm not sure what TBS is, Telephone & Data Systems (NYSE: TDS) is an Aggressive Holding in Conrad's Utility Investor and has returned 13.5% year to date--not huge in a year when the S&P 500 is is up 28.8% but a big time outperformance of the sector--and I think with a lot of room to run in 2022.

I've talked about Magellan Midstream, which has returned around 16% this year as well as ET at about 42%. And what we need for a lot more than that is a recovery in midstream volumes. I can't provide individual advice about taking losses for tax purposes--but a lot of us do have gains this year to protect and in my view a midstream recovery is going to take some time still. MMP has returned to modest dividend growth this year by the way and I expect ET to do so in 2022.

Tom L

6:11

Roger,

Roger Conrad

6:11

Hi Tom. Glad you joined us today.

Tom L

6:16

Thanks for your continued great work in the utility space. For new money, how would you rate AGR vs AQN?

Roger Conrad

6:16

I like both Avangrid and Algonquin at their current prices. I think heading into 2022, Avangrid probably faces more headwinds--mainly New Mexico regulators' rejection of its merger with PNM Resources (NYSE: PNM) and what it plans to do about that, as well as the ballot rejection in Maine of a powerline to run from Canada. Both could make it more difficult for the stock price. But shares are strong since mid-December and the offshore wind projects mean the stock should be a major beneficiary of any warming up of investors toward renewable energy. Algonquin also has key regulatory approvals pending for acquisitions--AEP's Kentucky Power and American Water Works' New York properties. I also expect to see dividend growth slow from 10% plus to upper single digit percentages. But the yield is also a bit higher than AGR's, which has not been raised since July 2018. Bottom line: I would split the difference.

Don R

6:20

Happy Holidays. Thoughts on SOHO now with the Covid spike. How about CWCO as a water play. And what is it going to take for KMI to finally move up near your buy up to target.

Roger Conrad

6:20

I think Sotherly has been doing enough right to still rate a speculative buy at 3 or lower, as I indicated in the most recent REIT Sheet. We're not likely to see a dividend next year, but neither is one priced in. I like Consolidated Water as a buy up to 14, though like SOHO the shares are taking a pandemic related hit as tourism to the Caribbean is likely to suffer. I think there's enough here to sustain the company though, as it's been proving resilience the past few year. As for Kinder, again it's going to take building evidence of a volumes recovery to lift the shares meaningfully, as is the case with midstream stocks overall. But the company has adapted to low volumes--so we're safe being patient.

Tom L

6:24

Roger, In your CUI+ portfolio changes that came out this week, I was surprised that you did not include any additions to the real estate sector, recognizing the portfolio does include MPW. Your rationale for leaving out a REIT?

Roger Conrad

6:24

Hi Tom. As you can see from the selections, this portfolio places a very high premium on diversification. So I generally do not recommend more than one of a particular sector. That includes utilities, a sector I've arguably been familiar with longer than I have with REITs--since the mid-1980s. I do currently have two big pharma stocks, so I wouldn't rule out having two companies with a REIT form of organization at some point. But at this time I saw more value--again given that this is a managed portfolio based on having a set amount to invest rather than just a list of recommended stocks--by adding representatives of other sectors.

Don

6:27

Is it time to tax loss T and RDSA and swap to VZ and CVX

Roger Conrad

6:27

Hi Don. I haven't advised selling AT&T or Shell in our advisories, so I can't give personal advice on tax loss selling either name. I can say that I rate AT&T a hold because I believe the component parts are worth more than the current price, and because I don't believe it's worth sinking any more money into until we get more information on what the split will look like. And I do favor Chevron, ExxonMobil and TotalEnergies to Shell--which is still suffering from paying too high a price for BG in the previous decade. I also prefer Verizon to AT&T--all the 5G upside without the transaction risk.

RBB / Robert Blum

6:31

Since there is a lull in the presentation, would you provide a thumbnail sketch of GMRE (Global Medical)? Also, are there any good, reliable informational sources (money banking, economics) that you guys may suggest (such as G Gammon or M Maloney). Appreciate your down-to-earth, substantive presentations (via chats and newsletters) and hope that you guys (+ Sherry) will continue to have a safe and happy holiday prior to the start of another twisted year. Thanks again. Take care.

Roger Conrad

6:31

Thanks Robert. Lifesciences are an attractive area of the REIT universe, nursing facilities/retirement homes not so much and I think investors really are fully pricing in a recovery that is unlikely to happen based on the numbers we're seeing. I will look at Global Medical REIT for possible future inclusion in the REIT Sheet. But at this point, I prefer something like Alexandria REIT in the Lifesciences area as a pure play, or Medical Properties (NYSE: MPW) for other types of property in this sector.

Allan

6:31

Thanks, Roger for your SSEZY in CUI.

Roger Conrad

6:31

Hi Allan. Thanks for joining us.

Jeff

6:33

Roger, what is your opinion on ORAN for dividend safety and growth in 2022.

Roger Conrad

6:33

I Jeff. I answered a question on Orange extensively earlier in the chat. it's a buy up to 16 in a very unloved sector (European telecom) with a high and safe yield.

Dennis

6:37

Thoughts on CVE (cenovus energy), TRTX (TPG RE Financial), RIOCF (RioCan REIT)? Thanks

Roger Conrad

6:37

I haven't covered TPG RE Finance but with few exceptions I would be very cautious about any mortgage REITs--things have gone well for the sector recently but they're a black box, in that we never know what's inside.

I like RioCan REIT in Canada as indicated in the REIT Sheet as a buy up to 18. See my comments in the current issue for more. Cenovus the oil sands company is a hold in our Canada and Australia coverage universe for EIA--I prefer Canadian Natural Resources (NYSE: CNQ) in that space.

Ron

6:39

I hold PPL , what do you think the dividend will be next year ?

Roger Conrad

6:39

Good question. As I indicated in the December issue of CUI, I think the stock is priced for about a 40% cut--which would position it to pay down debt more quickly, make investments in utility rate base and then resume growing off a smaller base.

ron

6:44

Would appreciate your outlook for BEPC which is near 52 weekly low.

Roger Conrad

6:44

The shares have actually caught a small bid here in the last few days of 2021. But the bottom line is (1) they got caught up in the Biden Trade whereby the shares were bid up on enthusiasm about anything green, and they've dropped this year as money came out of those names. (2) The underlying business of Brookfield Renewable has continued to grow robustly in 2022--in fact as the company has added scale, it's eliminated those massive bumps it used to hit when water or wind conditions in Canada or the US were worse than the year before. It's also continued to expand successfully to grow cash flow. I think both BEP and BEPC have potential for a big turnaround in 2022. And remember BEPC was up 106% in calendar year 2020--and it's still up 32% plus since inception.

Connecting…

Your current subscriptions

None

Register now to continue managing your subscriptions

E-mail Address	Chat Owner	Status	Remove

Enter your email address to be notified when Sherry Roberts hosts a chat