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6/26/25 Capitalist Times Live Chat
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AvatarRoger Conrad
1:56
Thanks for joining us today for our June webchat!
 
Per usual there is no audio. Just type in your questions and we’ll get to them as soon as we can concisely and comprehensively. We will continue so long as there are questions to answer in the queue and from what we received prior to the chat.
 
Also as usual, we will be emailing you a link to the transcript of the complete Q&A tomorrow (Friday) morning. And we will also post the transcript to the CUI and EIA websites.
 
Thanks again for your participation today and especially your continuing business. Now let’s get started with some questions we received by email prior to the chat.
 
1:57
 
 
Q. Hi Roger:
I hope you and the rest of Capital Times staff are doing well.
On page CUI Plus issue dated 6/11/2025, page 4, it says "Since
inception, our model income and growth portfolio is ahead by 45.65 percent."
On page 20, the portfolio value current value is $129,245 and the cost
is $100,000.
Shouldn't the portfolio's current value be $145,650 if the portfolio is
ahead by 45.65%?--Regards, Kerry T.
 
A. Hi Kerry

Thanks for writing.

The published return includes dividends, which for portfolio purposes
are assumed to be harvested by investors as income rather than
re-invested
I believe that's an appropriate way to calculate total returns in a
portfolio focused on income.
 
 
Q. Roger,
 
First, the amount of money you have made my family is mind-blowing. My in-laws started following you via the Utility Forecaster and doing drips because buying stocks before discount brokers was very costly. 
 
They owned Southern Company for that whole time and made more in dividends than they invested by 2000, literally a 100% return each year.
 
My family thinks you are a rock star and we are so grateful for you! 
 
We have a pretty good position in AQN Algonquin below dream price, both in Schwab and Edward Jones Accounts and neither of them reinvest dividends, they say they are unable to reinvest dividends on this stock. Assume its a Canada/US issue. 
 
 
We love dividends to buy more stock, especially when it's under dream prices and know we can buy more with low fees, but it's nice when it's automatic. 
 
Can you shed any light on not being able to reinvest dividends in this stock? I'm in the US. 
 
Grateful for you Tim Wahl 
 
A. Hi Tim

Thanks for writing. I'm very happy your family has had success with my
advice over the years. And I appreciate your continuing business.

I have to say I'm not entirely certain why your brokerage won't
reinvest Algonquin dividends into additional shares of stock, as it is
listed on the NYSE. But different brokerages have different policies.
The company itself does not advertise a DRIP currently, though it has
had one in the past.
1:58
As an alternative for building a position, you could simply use cash
in your account to buy additional shares on a regular basis. In any
case, my view is that Algonquin is in comeback mode. And I expect a
higher share price and dividend in the next 12 months.
 
 
Q. Hello Elliot & Roger,
 
Do you see any noteworthy things on the horizon for BCE?
 
P.S. I have followed you since the days of Personal Finance, and my portfolio has more-than tripled with your recommendations--even with conservative stocks!! Many thanks for your help.
 
Tom White
 
A. Hi Tom

I recommended swapping BCE for its Canadian rival Telus earlier this
year in Conrad's Utility Investor for a couple of reasons. First, I
thought it was likely to cut its dividend, while Telus was on track to
keep raising its payout twice a year. That's now happened, though I
think BCE's new dividend rate is sustainable.
Second, Telus is a more simple story. All operations are in Canada and
the company has been able to successfully leverage its 5G and fiber
network with other applications, such as Telus Health. BCE in contrast
has scaled back investment in Canada in response to admittedly
unsupportive regulation and has made a major investment in US fiber
broadband. I like the investment. But it does expose the company to US
regulation and allocating capital outside its traditional service
territory will not just keep debt at a higher level but also leaves
BCE's core telecom business more vulnerable to competition.

Both BCE and Telus are cheap at current prices. But I think Telus has
the greater upside.
 
 
Q. Hi Roger:
I appreciated your discussion about Vermillion Energy on pages 10 and 11 of the June 18 issue of EIA. 
Two Broad questions:
1. Why has the company’s stock price dropped so much in the last 3-5 years? 
2. And if you and Elliott are now recommending it, then the issues previously burdening the company have
apparently remedied?
Thanks—Barry J.
 
A. Hi Barry
Vermilion has first and foremost been a survivor--from the Canadian
trust phase out in the previous decade, to the sharp drop in oil and
gas prices a decade ago to the pandemic drop in energy, the Russian
invasion of Ukraine that drove up prices and then the drop in energy
prices since. The latest strategic moves should position it to cut
costs, increase production and reduce debt, with the sales of the US
and Canadian assets. So I think we are in good shape to move higher
from here. And the dividend appears well covered even at lower energy
prices.
VET has pretty much followed other small to mid-sized producers up and down over its history. The stock briefly broke into the
upper 20s following the Russian invasion--which tracks the surge in
oil and gas prices. And it's tapered off sharply ever since.
1:59
So it's been quite a while since this stock was at 25. And I think 10
represents a better buy below price. But if they execute their plans
and oil and gas continue to strengthen, I think the price will be back
in the 20s in the next 6 to 12 months. Smaller producers have that
kind of leverage. It works both ways and has been against us more
recently. And clearly, buying VET is not the same as buying XOM in
terms of risk. But I think better times lie ahead.
 
Q. Hi Roger:
 
I subscribe to all of your and his newsletters and have done so for many, many years. Thank you always for your joint sound advice and for explaining/clarifying investment concepts which so many of us have difficulty understanding!!!
 
Can you give us your opinion on these 4 companies not in CUI+? I acquired fewer than 100 shares in each of the following companies and cannot find the newsletter/source which originally recommended them. 
1. CMA – I thought you liked this bank at one time.
2. PFE is a competitor of ABBV. In your CUI+ newslet
newsletter, you recommend Abbvie. 
3. DOW – I believe the Personal Finance newsletter recommended it in September ’22. 
4. VALE is a competitor of BHP. We all know how much you like BHP. Is there any reason to spread risk and invest in VALE as well as BHP?
Thanks again.—Barry J.
 
A. Hi Barry
 
I have not followed Comerica for a while and have generally preferred the far smaller Arrow. But the dividend looks solid based on what I see. And financial stocks are not expensive now.
 
I've preferred Abbvie over Pfizer generally because it has a better diversified product line and very deep bench of products in development that can replace revenue lost when treatments lose their exclusive patents. They proved it with Humira and I think they have the products to replace Rinvoq and Skyrizi when the time comes several years from now. That said, PFE's dividend is pretty high and looks secure. And I think the perceived threats from the Trump administration to Big Pharma now are overstated.
2:00
I suspect the big dividend is what's drawn you to Dow Inc. The payout, however, has not changed for many years. Global market conditions aren't great for its products. And the company has been undergoing some restructuring that could significantly impact revenue. Bottom line--I'd be wary of this one3.
 
I prefer BHP in the resource mining space over VALE mainly because it's far more diversified particularly by geography--VALE in contrast is very concentrated in Brazil. And while I think that country at the moment has a stable regulatory regime, there's no certainty of that in the future. BHP in contrast has its most important operations in Australia and has consistently demonstrated it can operate effectively there. VALE and BHP appear to have settled the massive Samarco mine suit against them on amicable terms. But that is a reminder of political risks mining companies face, especially those located primarily in one country.
 
 
Q. Good afternoon Roger:
Some quick questions about BSM: 
 
1.   The distribution coverage is only 0.93 per your June 18 issue of EIA. But it currently trades below your Dream Price of 14! Can you tell us your short term and long-term assessments of BSM? 
2.   I take it that it is not an MLP which has the potential to grow like EPD, ET or MXLP, right? 
3.   So, if there is a likelihood of a dividend cut (aka dividend “reassessment”!!!), then is it better to allocate fresh capital to the above 3 MLP’s instead? Why buy BSM if the risk of a possible dividend cut could reduce its yield to that of PAA or MPLX, right?
Thanks.—Barry J.
 
A. Hi Barry
 
Blackstone is best thought of as a bet on natural gas prices--both the price and the amount of dividend. Cash flow--what it can pay out as a distribution--is basically volume of oil and especially natural gas produced on its lands times the realized selling price for that oil and gas. The principal properties are in eastern Texas, a region primed to service exports but that will only support additional production from current
levels at $3.50 to $4 natural gas. A boost in price above that level will elevate production and by extension Blackstone's cash flow--and dividend. But weaker gas prices mean lower coverage and the potential for a lower dividend.
 
I would say if your primary objective is a steady, high and growing dividend, then the midstream names you mention are better choices. If you want a bet on natural gas and can tolerate some volatility in the price and dividend potentially, then Blackstone is where you want to be if you want your return to be in dividends. EQT, EXE et al are producers that don't pay nearly as high a dividend but will provide a play on natural gas.
Hello:

Q. I'm thinking about buying some DMLP. It's in the Midstream and MLP
spreadsheet as buy under $30. 
2:01
. I don't remember reading about it in the
EIA newsletter. How do you like the prospects for DMLP?-Regards, Kerry T.
 
A. Hi Kerry

We've written about it in the past as a variable dividend company.
Cash flow is basically the volume of the royalty oil and gas produced
on its lands times the realized selling price. That amount will
fluctuate pretty much day to day. So the result is the dividend is
higher when energy prices are higher, and lower when they drop. The
main difference with Blackstone (BSM) that we have on the High Yield
Energy List is Blackstone tries to pay out at at steadier rate and
will only change when there's a meaningful change in cash flow. DMLP
will just pay out what it earns.

We believe we're in early to mid innings of a long-term energy
supercycle that will end with prices at considerably higher levels.
And that will almost certainly mean a much higher dividend and share
price for DMLP as well as BSM and others.
The only caveat is that you
need to be ready for some volatility in the share price and dividend
if prices drop. If you're looking for a safe, reliable dividend, the
midstream operators are going to be the better bets. DMLP is included
in the table mainly because of its capital structure (MLP)--it's no
owner of pipelines and I apologize if that's confusing.
 
 
Q. Hey guys, I can't remember how you rate NLY, are they at risk with the coming decline in the real estate market? Troughout their history, even the lowest return on their dividend seems great, right?--Eric
 
 
A. Hi Eric

Annaly was the one financial REIT that did not go belly up in
2008--though shareholders did get pretty badly rocked at the time.
Financial REITs basically make their money as a spread between their
cost of capital--basically what they can borrow--and their return on
investment. So many of them will focus on higher risk areas of the
market where rates of return are higher and count on their ability to
understand risk to prevent big losses--though they have to be willing
to live with nonpayment in some cases. That's basically what happened
to a number of financial REITs that focused on commercial property
mainly office loans over the past five years or so.

Annaly has focused on government agency debt in recent years. That's a
fairly low risk area relative to commercial property. But dividend
coverage is frequently very tight as it is now. So increase
notwithstanding, the payout should be perceived as being aggressive.
I've generally advised investors to focus on equity REITs rather than
financial REITs the past few years. The spread can be threatened by
both bad credit--in the case of a recession or real estate
downturn--and by volatile interest rates. Annaly is a larger financial
REIT with a solid reputation and focus on lower risk areas. So it
should be able to access capital on reasonable terms in an economic
downturn. In fact, the cost of funds could actually decline, as it
would for many investment grade companies when the Fed starts cutting
rates. But this is not a group that has historically fared well in
downturns.
2:24
Q. Hello gentlemen-

Thoughts on the PAA/PAGP sale of their NGL assets? Good sale price? Does this impact the acquisition likelihood, positive or negative?

Speaking of acquisitions, I hadn’t seen any question about a curious feature of the SUN acquisition of Parkland: Sunoco will make a new class of c-corp shares to buy Parkland (similar to the PAA/PAGP structure, or the BEP/BEPC and BIP/BIPC structures Brookfield likes). If past patterns hold, the C-corp shares should trade at a premium, making them stronger currency for acquisitions. Since SUN is essentially an ET entity, is this a signal that ET management sees the benefits of this dual structure too? (I don’t see that the symbol ETC is in use…) So could ET could use this c-corp shares mechanism for its next buyout? …including a more convenient structure for buying out PAA/PAGP? Just offering MLP or c-corp shares as appropriate for each category of Plains shares?
Good to see BEP finally getting momentum, but it seemed to follow a couple news articles describing that the Westinghouse unit is becoming more profitable. Thoughts? How big is the nuclear component in the business? (I thought relatively small.) Are there growing signs that nuclear (for which I would never hold my breath) is actually contracting and building, not just studying?

Thanks!
Dan N.

A. Hi Dan

Yes I think Plains' sale of its Canadian natural gas liquids business
makes a lot of sense. First, the company gets about $3.75 bil in
cash--a portion of which it will use to make a special distribution of
26 cents per unit for PAA and PAGP units. But the main benefit is it
further focuses Plains on its core US business and takes it out of the
line of fire of future trade turmoil with Canada. The price appears to
be a fair valuation--and the assets are an easy fit for acquirer
Keyera, which expects CAD100 mil in annual synergies. The deal is
expected to close in Q1 2026.
I do believe this sale makes Plains a more attractive acquisition
target, as it further focuses the business on the core Permian Basin
assets. And that's still my expectation ultimately, though the company
is more than capable of growing cash flow and dividends on its own.

There are certainly merits to trading C-Corp shares in addition to
partnership unit. Brookfield's BEPC C-Corp shares, for example,
currently trade at a meaningful premium to the partnership units
($32.58 versus $25.54)--despite paying the same dividend without the
tax advantages and conveying the same ownership. That the price gap
has grown so wide doesn't make a lot of economic sense. But it does
indicate more than just the fact that investors hate K-1s. Mainly,
many institutional accounts can't own partnership units, so C-Corp
shares open up a whole new range of investors and lower cost capital
for partnerships.
2:25
Will Energy Transfer LP adopt a C-Corp share? That's for them to
decide. But I could see a lot of appeal for an
"ETC" to complement ET--and I believe it would trade at a sizable
premium to the MLP units--providing a new source of low cost capital.
Sunoco equity is the preferred funding vehicle right now for ET. But
if the C-Corp shares come to trade at a meaningful premium you could
see the parent make a similar move.

Brookfield C-Corp shares have certainly seen considerable benefit from
the nuclear connection and the partnership units have to a lesser
extent. The company itself hasn't said a lot about Westinghouse. But
its 49% partner in the company Cameco has indicated it expects a $170
mil boost in its share of Westinghouse EBITDA for 2025. Westinghouse
also expects 6-10% annual earnings growth going forward. And Cameco
expects its distribution from Westinghouse to rise this year, so
Brookfield can expect the same.
Ultimately, Westinghouse could be a big driver of growth for both
companies. Cameco's main business will still be uranium mining. And
Brookfield's primary business will still be power sales contracts with
Big Tech--with a major kicker from low cost hydro in key markets that
it should be able to sell at a much higher price the next few years.
Sohel
2:29
Hi Elliot, Thanks for holding these chats! What is your latest perspective on the Fed's likely moves for the rest of the year? Also, would love to hear your perspective on the overall economy and recession risks for the remainder of 2025.
AvatarElliott Gue
2:29
Thanks for attending the chats. We find them very useful as well for highlighting areas of interest to readers. I don't see elevated risk of recession over the next 6 to 12 months. While the survey-based data has been weak, we just haven't seen any major pass-through into even high-frequency "hard" economic data like initial jobless claims. I suspect the Fed will cut 1 to 2 times this year. I think Treasury yields (10-year and 30-year) have likely already seen their peak in 2025. After all, yields never break out even amid all the bond bearish headlines out there regarding the "Big Beautiful Bill" and inflation.
Sohel
2:32
Hi Elliot, Appreciate you thoughts on the SHEL. Would you rate better than TTE (ie sell TTE and buy SHEL) at current prices and yield for a retired investor.
AvatarElliott Gue
2:32
I like both SHEL and TTE. Generally, I'd give SHEL the slight edge because of their natural gas business and their decision to deny an intent to acquire BP removes a near-term price risk for them. However, if I had to pick just one major to own it would be XOM -- their production profile is just way superior to the UK /EU majors.
susan p
2:33
YTD, Blackstone Minerals has dropped more than spot prices of nat gas and WTI oil. Do either of you have concerne their variable distribution policy could mean another drop (versus their stated hope to return it to pre-cut 2024 levels). Alternatively, do you see the decline as an opportunity to add to an existing position, given the potential for increased volume activity on their acreage? Thanks much
AvatarRoger Conrad
2:33
Hi Susan. I do think the current price of natural gas supports Blackstone's current distribution rate--both from the standpoint of realized selling prices for output from its lands and third party production volumes on its lands. The shortfall in Q1 distributable cash flow with the dividend was primarily due to a one-time expense that should enable third parties to further increase output. And a takeover offer for producer Aethon should be a plus for that company's staying power.

That said, while I believe management wants to return to the dividend to the pre-2024 cut rate, this is not a company that will take on debt to sustain the payout if gas prices fall from here. So while we are bullish gas and Blackstone, a dividend cut is always a risk--as it is for all royalty companies.
susan p
2:38
Apologies for an earlier BSM query submitted prior to seeing others ask similar questions on it. That said, has the ensuing price action in nat gas after the recent geopolitical developments changed your view that it is "the year of natural gas"? Thanks
AvatarElliott Gue
2:38
Thanks for the question. I think the Year of Natural Gas theme remains good here. While geopolitical headlines pushed around the price of natural gas front month futures, the curve remains supportive with December 2025 futures at $4.60, January 2026 at near $4.90 and Feb. 2026 at $4.60. For our recommended gas-focused E&Ps like EXE and EQT, the near month futures are generally irrelevant to free cash flow as they hedge production months ahead of time. Meanwhile, if anything, we're actually seeing some of the LNG export terminals come online ahead of schedule, which is encouraging. That's one reason we like the Venture Global (VG) here as their "modular" LNG terminals can be constructed more quickly.
Frank
2:39
First, my heartfelt thanks for putting these on. I know of no one else that does these kind of interactions with their subscribers. With the markets near all time highs, nothing seems to shake them. In this environment what percentage of one's portfolio should be held in cash?
AvatarRoger Conrad
2:39
Thanks Frank. We enjoy doing them. And I can honestly say, we get as much out of them as (hopefully) our customers do. So thanks for participating today.

We've been reasonably heavy holders of cash for some time. But it's also worth noting that "the market" as defined most commonly by the S&P 500 is more than one-third invested in just 8 big Tech stocks. These stocks and by extension the S&P 500 now trade at extremely high valuations arguably unmoored from actual business value.

Other sectors, however, are arguably still quite cheap. That's in part because they're not a big part of the S&P 500--the entire energy sector is less than half the S&P 500 weight of Microsoft! The real story in the stock market isn't that Big Tech isn't going down--it's the ongoing rotation from overweighted Big Tech to the rest of the market.
Mike C
2:40
Good afternoon gentlemen - Many thanks for holding these chats regularly - they are something I look forward to each month, and are much appreciated (as is all of your guidance!).
AvatarElliott Gue
2:40
Thanks for joining the chats and asking questions. Roger and I both also look forward to these chats. It's something I've now been doing for various services for nearly 20 years and it has consistently been one of the most popular features we offer.
AvatarRoger Conrad
2:47
I will add to my last answer that the CUI Plus/CT Income is right now about 15% in cash--that's somewhat less than where we started the year. The reason I've drawn it down is there were a couple stocks I wanted to buy. But I do believe a fair chunk of cash is a good idea, especially with the Vanguard Federal Money Market fund still yielding north of 4%.
Mike C
2:50
Two questions: any new thoughts on PBR, given that ILF is now a trade and apparently the Brazilian government is buying shares? And, in your part I of EIA this month, you both commented that you thought some MLP dividends were too high. Can you elaborate? Many thanks!
AvatarElliott Gue
2:50
Latin American stocks are interesting here as we've seen a significant rotation into emerging markets this year. Also, while the Europe trade -- rotation into European stocks -- was looking a little extended in May, I think there's more room for global asset managers to move into emerging markets, which are less extended. I like Brazil in particular and I think Petrobras is an interesting name I'm watching. Production growth out of Brazil has been a bit disappointing this year. However, I am encouraged that the Brazilian economy has held up quite well even as the central bank has hiked rates. Also Brazil's legislature recently voided a Presidential decree increasing the country's financial transactions tax. That's the first time that's happened in more than 30 years. I think that aids confidence that the Lula Administration isn't in a position to push through more radical elements of his economic agenda.
AvatarElliott Gue
2:50
As for MLP dividends, what we were saying isn't that dividends are too high but that yields are too high. I think Roger has posted a slide/table to this effect a few times over the past year or two. Basically, some of our favorites have been increasing distributions for years, even through the energy bear market, yet stock prices haven't risen as much. In effect investors are demanding a higher yield to buy some of these MLPs even though their businesses are stronger than ever and distributions are rising. The results of this in our view is that share prices will rise and yields will fall accordingly over time.
bobd
2:51
I was looking at the MLP list on the energyandincomeadvisor website for more investment ideas to diversify my energy portfolio. I already own EPD, ET, MPLX,  PAGP, HSEM, KMI, SOBO, CAPL, BEP, and BSM. Anyway DMLP caught my eye. It's a royalty play like BSM, but I was thinking in an energy upcycle like what we have now, that might be a good idea. Any thoughts on DMLP or others that I might look to to diversify my holdings? Thanks!
AvatarRoger Conrad
2:51
We currently rate Dorcester a buy in the "MLPs and Midstream" coverage universe--which you can find on the EIA website under the Portfolios tab.

Unlike Blackstone which tries to pay a consistent dividend, Dorcester actually varies its dividend from quarter to quarter--basically reflecting production volumes on its lands and realized selling prices for oil and gas.

As I answered in an earlier question concerning Blackstone, we're bullish gas longer-term. But DMLP is only appropriate for investors who can stomach volatility in the dividend--which is also the case for Blackstone.
Sohel
2:56
Hi Roger, Thanks for holding these chats - find them incredibly useful. Barrons had a recent article on AI and pipeline companies. They touted KMI in particular. Are there other pipeline in your coverage universe that are you like that stand to benefit more from that perspective. Thanks
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