JotCast | 5/14/20 Conrad's Utility Investor Live Chat

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5/14/20 Conrad's Utility Investor Live Chat

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Roger Conrad

8:27

Thank you for that comment. I very much appreciate it.

Howard F

8:28

thoughts on cresud

Roger Conrad

8:28

Sorry Howard. I don't know that one. Please drop me a line later if you have another question.

Guest

8:29

Hello Roger,

Guest

8:30

re: the upcoming folding of TERP into Brookfield. I own TERP. any advice

Roger Conrad

8:30

My current advice is to hold on through the merger. The only exception would be someone who already has a big slug of Brookfield Renewable Partners. But this is a nice deal and BEP is a good one to hold long-term.

Kevin

8:33

Hello Roger, Years ago WRE was a mainstay of your Income Portfolio. I held it for years and profited nicely, I noticed today that it's made another 52 week low. It seems that only 17% of there properties are retail, is this an ovwe reaction? I know you are right there in the D,C,

Roger Conrad

8:33

It's one we track in the REIT Sheet. They did withdraw 2020 guidance last month and as a capital area resident, I can tell you things are pretty much shut down around here for the time being. I think they're doing a good job circling the wagons and protecting cash flow--and the dividend, at least judging from what they did say in the Q1 conference call. But I'd probably rate it a hold at this point, given this unprecedented uncertainty.

Kevin

8:35

area. would you be kind enough to comment. Thanks as always for all you do. Kevin

Roger Conrad

8:35

I think Alexandria Real Estate Equities is in as good a place as any REIT can be right now and the shares and earnings have been generally solid, as you'd expect from a company leasing laboratory space during a health crisis. I think it's a solid buy around the current price, which is actually well off its high point--This is also a REIT Sheet recommendation by the way, and it's been solid for us.

Ben V

8:40

If the current lower for longer oil price environment persists, will the resulting drop in production in the US shale patch translate into a more favorable operating environment for the almighty Pembina? If so, how long do you foresee this transition taking? Thinking of loading up on PBA on a drop to $18 or so and waiting out the carnage but I'm wondering how long I will have to wait to see price appreciation, happy with the dividend but would like to see the share price return to $30 or so which I think it deserves.

Roger Conrad

8:40

It definitely doesn't hurt producers elsewhere in North America that production has slowed in the Permian Basin and elsewhere. And that's very likely why the huge spreads between Canadian oil and benchmark US prices have narrowed as much as they have--since pipeline capacity has been freed up.

I don't think Pembina is infallible certainly. But what's positive for its customers is for it as well. i wouldn't be surprised if the share price did revisit 18--all we really need for that is a broad stock market swoon or another dip in oil prices. But it is even now under my Dream Buy price. As for a price recovery, this is a very liquid high quality name with a history of big rebounds. I think given the asset expansion this company has done that it will be a 50 stock the next time energy heads up. i do think we have to be patient for that to happen but so long as it stays solid as a business I think it will.

Robert P.

8:43

Roger, your thoughts on AT&T, please? Currently below dream price.

Roger Conrad

8:43

I didn't think Q1 results were terrible but they did show the media division has been hurt by COVID-19 fallout. That really shouldn't have surprised anyone though an the important thing with AT&T is they're still generating the free cash flow they need from subscription businesses like wireless to pay the dividends, fund industry leading CAPEX and pay down debt an an accelerated pace. That's not something many companies can say. And trading at 9 times expected 2020 earnings, the bar of expectations is very low. It may take a while for AT&T to post breakout earnings but I have no problems holding the stock at this price--particularly with 5G getting ready to ramp up.

Robert P.

8:45

Roger, should of been a bit more specific on AT&T. Your thoughts on dividend safety and continued growth. Seems the Time Warner acquisition is troubled as well as Direct TV.

Roger Conrad

8:45

Yes, I think the dividend is safe so long as they keep generating free cash flow of this magnitude. I wouldn't call the Time Warner acquisition troubled--there are great assets and the business model of matching network and content does work long-term. But these operations will be a drag so long as COVID-19 fallout is with us--and the company is going to have to compensate with cost cutting and growth elsewhere like 5G adoption.

Alex M.

8:48

Hi Roger. Thoughts on MDU? It has a solid track record for dividend growth, but I also see that it has several non-utility business units (construction, pipeline, etc.). Does the recent price decline make it an attractive buy, or could it be another CNP since it has pipeline exposure? Thanks.

Roger Conrad

8:48

I think it's a world away from what happened to Centerpoint . For one thing, MDU's construction operations are still going strong as noted in Q1 results. For another, the dividend is funded by regulated utility and pipeline results. It gets paid even if the construction business takes a huge hit this year--which as I've said is not indicated in anything we've seen so far.

I'm definitely on the lookout for how that business is doing this year. But again, the company is not depending on it to fund the payout, which is a big contrast with Centerpoint's reliance on its investment in Enable Midstream Partners.

richard

8:49

any fixed income ideas investment grade that are 1-4 years maturity ??

Roger Conrad

8:49

I do have a fixed income "portfolio" that it's time to review, look for it in an upcoming Utility Roundup.

Alex M.

8:51

With the recent headlines at Uniti and their dividend declarations (now running a few quarters in a row), do you see the company as ever being eligible for investment or is it still too highly speculative? Thanks.

Roger Conrad

8:51

So long as it's so dependent on Windstream Holdings--which dropped more than 9% of revenue over the past year--Uniti is in my view a ticking time bomb. They seem to have recently squeezed short sellers and Windstream looks like it's going to come out of Chapter 11. But they basically had to pay dearly to keep the master lease agreement with Windstream viable. And again, that company is still vanishing before our eyes--losing both consumer and enterprise revenue at a rapid pace.

Kevin

8:52

Roger,I sent a message in two parts by mistake asking your opinion on WRE. I placed a bid this morning and would really like your opinion. Sorry for the confud

Roger Conrad

8:52

Hope I've answered it to your satisfaction. If not drop me a line at service@capitalisttimes.com

Alex M.

8:55

I've been adding to conservative holding Avangrid as the price has dipped below 40. What are your thoughts regarding the company's ability to return to dividend growth in the future? The dividend has been held steady at $1.76 for a couple years. Thanks.

Roger Conrad

8:55

I think they're not prioritizing dividend growth--that's something I learned at Edison Electric talking to management. Rather, they want to build their renewable energy portfolio out--keep in mind their primary owner is Iberdrola SA. And there's definitely a good argument for moving fast now to lock down business with tax advantages running out and projects that qualify as essential getting to move ahead while others stall. I think even without the dividend growth, AGR is a good buy up to 42. But for dividend growth coupled with renewables, Algonquin is more attractive now.

Hans

8:56

Perhaps my questions were missed, since I asked them around 2.45 pm. but the questions were : what is your outlook now for CHL and the second question was : any update on BPY since you have that as an hold

Roger Conrad

8:56

BPY is still a hold and I will be making a decision on it the next few days--with the next CUI Plus update. I did answer your question on China Mobile--still like it as a buy up to 52.

don

8:56

Roger--which stocks in your portfolios have the safest dividends? Thanks for your great work over the years.

Roger Conrad

8:56

The Conservative Holdings all have my total confidence for dividend safety.

don

8:58

Roger--on your recommendation I bought Telus (TU) some time back and love the dividends. Would you buy more on any dips?

Roger Conrad

8:58

So long as it's under my buy target. It's a solid company and is weathering COVID-19 well--not being weighted with media business definitely helps. They're also well positioned for 5G growth.

Alex M.

8:59

Is your general approach to average down when building a position? For instance, you buy XYZ company at $50, then add to the position if it pulls back to $45, etc. Thoughts on this strategy to entering and building a position? Thanks.

Roger Conrad

8:59

I think if you're buying in increments you want to use time as a guide, rather than try to predict price movements. Buy a third now, a third in a month and the last third a month after that. You can supplement that with throwing the whole thing in at once if a Dream Buy price is reached.

jim

9:00

Hello Roger. I posted an entry very early in the chat i've not seen a reply to. Please advise about problems in questions making it to your in-list. I don't want to re-post and be redundant.

Roger Conrad

9:00

If you've posted your question, I'm pretty sure I've answered by now--as I've basically gone down the list by order received. If for some reason your question didn't post today, please write me at

service@capitalisttime.com

Arthur

9:01

Is TERP being bought?

Roger Conrad

9:01

Yes by one of our Conservative Holdings, Brookfield Renewable Partners. I have more details in this month's Utility Report Card comments for TerraForm.

Jon B

9:02

I sent a couple questions to the service@ email since submissions here seem to have been lost today (??). Hope you can take a look and respond when you have a chance.

Roger Conrad

9:02

Sorry about that Jon. I will also ask Sherry to make sure I do so.

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