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8/26/25 Capitalist Times Live Chat
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AvatarRoger Conrad
1:56
Hi everyone and welcome to our August live webchat. As always, there is no audio. Please type in your questions and we'll get to them as quickly as we can. We will be sending you a link to the complete Q&A tomorrow morning. And it will also be posted on the EIA and CUI websites.
1:57
Let's start as we always do with some Q&A from emails we received prior to the chat.
Q, Your strong recommendation for HASI in this month's CUI was persuasive, and I have initiated a position. HASI reminds me of two other BDCs, MAIN and HTGC, that are niche lenders with high credit quality who have achieved steady growth of earnings and dividends over the long haul. That said, I still have some questions about HASI. First, what would be a typical "low risk" borrower who would pay 10.5 percent interest to HASI? Second, what keeps other lenders from rushing in for such a sweet deal? And third, in your article you stated, "HA capital may replace tax equity." Please explain. And thanks for taking these questions.—Roy W.
 

 
 
A. Hi Roy, The “yield” cited by HA in its statements is not equivalent to the interest rate on a loan. It’s instead a return on investment—which in a growing number of cases is actually equity.
 
The risk assessment HA reports is based in its own analysis of credit quality. That is its competitive advantage—being able to do its own analysis of projects and assets based on
1:58
its own experience and expertise. And the proof of its skill is the consistent lack of bad investment/unpaid debt. 
 
The reference to tax equity is that the OB3 phased out tax credits for wind/solar etc. That means fewer tax credits available to purchase. What HA is saying is it has the access to low cost capital to make up the difference for its customers, who are attempting to finance new projects.
 
Hope this answers your questions. Risk with HA, as is the case with MAIN etc, is they lose their touch. But things seem to be going well based on Q2 results.
 
 
 
Q. Thanks for your note last night that helps me better understand HA. I strongly agree with your emphasis on management's track record of accurately evaluating project risks; that record was probably the most important factor in my decision to initiate a position in HA.
 
I am still unclear, though, on what kind of entities are receiving funds from HA. An example or two would help.
 
 
Finally, my guess is that even after OB3, there will remain a complex thicket of incentives and regulations for green energy projects. HA's expertise in this niche would thus be expensive to duplicate for other financial intermediaries. And that should be a durable competitive andvantage for HA. Does this guess make sense to you?
 
And thanks again for your CUI piece on HA.—Roy W.
 
 
A. Hi Roy

Following up on your questions, the federal government has a great
deal of influence over what happens on public lands, not so much on
private lands without an act of Congress. But in any case, HA's
project risk is not as great as it might appear. First of all, it has
over 550 investments in 9 different categories, including storage and
renewable natural gas, which are actually favored in OB3. 47% of the
portfolio is behind the meter--adding another layer of privacy for
customers. That's a great deal of diversification and portfolio
protection from a wide range of risks including regulatory.
As for individual customers, HA provides a great deal of color in its
10K. though details of individual contracts are considered
confidential for the most part. I would suggest that as a starting
point for a deep dive. The company also lists the companies in which
it has equity investments, along with details of its controls and
procedures. The presentations on the company website are also useful.

 
Q. Good morning Roger and I hope this email finds you well. It is difficult to get news and analysis on AGLXY. I see they announced mixed earnings and the stock price has been erratic the last couple sessions. Just curious your opinion as I consider opening a position. Thank you—Steve W.
 
A. Hi Steve

I think the operating results for AGL were pretty solid. Their investment plans in energy storage appear to be in good shape, with regulators in support, financing in place on reasonable terms and procurement now set with the Fluence contract. They’re holding retail share and the electricity market in Australia is
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fairly tight.

I think what disappointed was the dividend was set more conservatively than expected, myself included. But given the magnitude of the investment plan that actually makes sense. And they want to get assets in place under the current government so as to reduce political risk. I intend to stick with AGL.
 
 
Q. I am curious if Liberty Energy (LBRT) has merit for consideration from an EIA perspective? Sec Wright's former company that he founded, know for its fracking, has been partnering/investing this year in ways that caught my eye--e.g. OKLO to build infrastructure for their SMRs; an engineering firm (IMG’s Energy Solutions) to enhance Liberty's modular power products; and in 2022, Natron Energy for its battery storage expertise. The stock is beaten down so much, it now yields 2.7% -- a div that was increased
in 2023 and 2024. The stock's descent seems to have stabilized over the past 3 months but it's still down over 40% YTD. Thanks for your reaction if you have any thoughts on it's longer term merit.
 
 
A. Hi Susan
 
I don’t know a lot about Liberty—we generally prefer the stocks in the EIA model portfolio. But that’s probably a good question to ask again in the chat today.
 
My view on OKLO—which the DOE Secretary has also been involved with—is it’s an extremely hyped stock that’s still some years (at best) from actually making any money. The competition is fierce for developing the next commercially viable SMR or large scale nuclear reactor. And at this point, the whole business depends on billions of direct federal subsidy. Nuclear power is still a vital piece of the US power mix.
Southern’s new AP1000s at the Vogtle site are going to produce for years. And utilities will place orders for new reactors, but only when they can come to investors and regulators with a design that they can credibly maintain can be built in a manageable period of time and at a predictable. Until then, this is all so much hype. And at worst, this could turn into the green bubble early in the Biden administration. 
 
 
Q. Hi Elliott:  
I don't understand your recommendation for PAGP.... From what I understand, their income and revenue both decreased in the last quarter, and they sold their LNG business. Their stock also got hit after their last earnings report. I thought you felt LNG is our future? Why your buy recommendation?—Jack A.
 
A. Hi Jack
 
Plains All American Pipeline—Plains GP’s only asset is PAA shares—sold its NGLs business in Canada. NGLs are natural gas liquids like propane, ethane etc. LNG is liquefied natural gas. There were no LNG related assets in this transaction, which is expected to close
2:00
in Q1 2026.
 
Selling the NGL processing assets in Canada frees up cash and allows Plains to better focus on its Texas operations. I think the deal is good for both sides and will give a boost to Plains’ investment plans. They’ve already made one major investment and the proceeds should also help them cut debt.
 
With midstream companies like Plains, revenue is often affected by commodity prices but there’s not a real impact on cash flow—which is the better measure of profitability, ability to pay dividends etc. I thought the Q2 results were solid and as we pointed out in the EIA issue, they raised guidance—always a very good sign. These stocks have been soft this summer. But we see Plains as being on track.
 
 
Q. Hi Roger,
 
Inasmuch as I have a position in BKH I have an interest in the proposed merger. Can you provide some commentary as to whether or not this is a good deal? Should I continue to hold my BKH shares?—Jim C. 
 
A. Hi Jim
 
I think this is a good merger that will benefit both parties. No
merger of regulated utilities has ever failed to create a stronger company. Black Hills and Northwestern Energy operate in generally utility friendly states and have complementary assets. Both companies have also caught a big break from the Trump Administration more benign view toward aging coal power plants. As a combined company they’ll have more flexibility to manage their remaining facilities to boost profitability for their remaining lives. Both stocks are recommended buys in Conrad’s Utility Investor’s broader Utility Report Card coverage universe.
 
 
Q. Hi Roger. This is a REIT question. I’ve read a few articles recently about the rapid rise of Baby Boomers reaching assisted living or nursing home age and the lack of supply for same. Do you think this is a real demand dynamic? Are there any senior living REITs you recommend in the REIT space? Thanks for all you and Elliott do!—Tom L.
 
A. Hi Tom. I’ve recommended Ventas Inc (NYSE: VTR) in REIT Sheet the past few months and it’s done well—raising
2:01
guidance following strong Q2 results. It’s also a cheaper stock than the sector leader WellTower. And is a potential takeover target. I also like Equity Lifestyle Properties (NYSE: ELS), which owns alternative/resort based senior housing, including manufactured housing, RV parks and marinas.
 
If you’re interested in more REITs coverage, check out the REIT Sheet. Please give Sherry a call at 877-302-0749.
 
 
Q. Roger 
 
What are your thoughts about Unitil’s (NYSE: UTL) large share offering $4 below market? Thanks--Dennis H,
 
 
A. Hi Dennis 
 
Unitil is in the middle of closing several acquisitions that will add significant revenue. This stock offering maybe could’ve been better timed from a shareholder standpoint. But it does lock in financing on reasonable terms for
these deals—which should create a larger and stronger utility.
 
 
Q. Roger: Thought I would ask about some of my poor performing stocks. 
What are your thoughts on Devon, and Vital Energy (VTLE)? Thanks.—James C.
 
 
A. Hi Jim

Most energy stocks have had a hard time making any ground this year. Our feeling on Devon Energy is there are better producers—in gas EQT, EXE etc. DVN will benefit from higher commodity prices. But we see the others as giving more bang for the buck. And we’d generally advise orienting portfolios toward them.

Vital Energy had a great day earlier this week thanks to a takeover offer. It’s in CRGY stock, so the dollar value will vary into the close later this year.
We generally see consolidation as positive. And deal value would improve if commodity prices rise—though again we favor the stocks in the model portfolio.
 
 
Q. Dear Roger, I am hoping you can help me sort out a basic investment question. I am not asking for advice about a particular stock - my question is more general in nature.  
 
I have held some stocks you recommended many years ago which are now paying very high dividends with a capital appreciation at least9 times the amuua/ dividend/distribution amount. Quite some time ago, I seem to remember that you recommended that it is often a good idea to harvest dividends when capital appreciation exceeds five times annual dividend earnings. Now, the stocks that I am holding are still trading below your recommended buy-under limits, and all of your comments about these stocks indicate that you think they are very fine investments to hold for the future.
 
Now, according to your general philosophy, as state sin your various advisories, you recommend selling
2:02
stocks that are weakening and stocks that are exceeding your take-profit levels. But you don't really give advice about what to do with stocks that don't fit into those two categories but greatly exceed the five year divided issue. 
 
 
 If holding these stocks does not severely unbalance one's portfolio by either sector or individual position, is it foolish to keep holding them, or does it make sense to harvest incrementally just as you advise to invest incrementally?
 
I am sure that I am not the only person who wonders about this situation.
 
I hope my questions do not contravene the ethics of your newsletter advisory.—Jeffrey H.
 
 
A. Hi Jeffrey,
 
Great question! I hope you don’t mind my sharing it in the chat.
 
Generally, I think if a company you own is still reasonably priced and business growth is on track, then you’re well off to stick with it—especially if you’re not over weighted. As for reinvesting, so long as you don’t need the cash, why not just keep letting the dividends compound the value of
the position? So bottom line is if a stock you own meets these parameters—growing business and dividend, not extreme priced on momentum and is in balance with your portfolio—stick with it.
 
 
Q. Hi Roger:
1.   Any idea on what the dividend increase may be that PAA will declare?
2.   And approximately when will PAA declare it? 
3.   I obviously would like to buy PAA in advance of their declaration unless you believe that such anticipated increase has already been factored into its share price.
Thanks.—Barry J.
 
A. Hi Barry. The special dividend is part of the sale of Plains' Canadian LNG operations to Keyera Facilities. The "approximate" amount is 35 cents per share and is expected to cover any taxes unitholders may incur with the sale. The pay date is expected to be in Q1 of 2026, though the timing will depend on Plains' ability to close the deal within that time frame--which will depend on how long the regulatory process takes.
 
I don’t expect the payment of that dividend to have much impact on Plains’
2:03
share price. I do expect a fairly large base dividend boost in October.
Well that's what we have for the pre-chat questions. Let's get to some live ones!
Jay
2:19
Nuclear power has been hot due to AI.  Can you discuss you opinion on AI and what might be good investments to look at.
AvatarElliott Gue
2:19
AI is behind an acceleration in the growth of electricity demand.

Nuclear is certainly one way to play that though we think some names like Cameco are a little overdone on the upside.

We also think gas is a big winner since natgas generation can be constructed relatively quickly and easily here in the US whereas nuclear capacity is a longer term story.

Further, in practical terms, new renewable capacity must be backed up by natural gas  to offset the inherent intermittency of solar/wind.

There are a lot of ways to invest in the natgas story, many that we covered this summer in Energy & Income Advisor. On the producer front, EQT (EQT) is probably among the more aggressive in targeting AI generation growth. Specifically, the company is partnering on projects in Pennsylvania -- near its core base of operations -- to convert old, retired coal facilities to natural gas. New AI data centers are being built near these power plant sites and are contracting to purchase natural gas from EQT under long-term deals
AvatarElliott Gue
2:19
a number of the midstream names will also benefit from increased volumes of natural gas flowing through their systems.
Jeffrey H.
2:22
Re: Windpower: Dominion and Eversource
Dear Roger, I understand that this question involves some crystal ball gazing, but do you think the recent government decision about the Revolution Wind project has any bearing on Dominion's wind project? The market apparently doesn't think so -- but it certainly did trash Eversource a bit. I had bought Eversource when it had dropped into the low 50s a few months ago and I added to it slightly last night. Do you think that the Revolution situation will seriously compromise its guidance? Thank you
AvatarRoger Conrad
2:22
Hi Jeffrey.

I see Eversource is rallying a little today. Their exposure to the Revolution Wind project as you might know is basically limited to the transmission--which is regulated, so ratepayers will eat the cost if this project is actually cancelled.

I think the developers do have some legal recourse here, as the project was fully permitted and all the major construction is done. And it looks like the Administration is trying to strong arm the New England states into building a natural gas pipeline as they said they did in New York this spring (the state denies it).

Dominion's project is fully regulated. So we Virginia ratepayers will eat the cost if it's cancelled. I doubt that will happen because (1) it would hand Democrats a huge issue in an election year, (2) Dominion is already building a lot of gas.

I do think all five of the offshore wind projects now in development will eventually get built--there's just too much need for the electricity. These delays will cost ratepayers though.
Sohel
2:30
Hi Elliot, What's your outlook on the economy in the next couple of quarters? Do you foresee strong odds of a recession or will all this dovish talk of interest rates drops head that off?
AvatarElliott Gue
2:30
I see no sign of imminent recession.

The Bureau of Labor Statistics (BLS) payroll data is just of increasingly low quality. It's always been prone to revisions, particularly near turning points for the economy, but the bigger problem we've seen, particularly since 2019 is that survey response rates for both the Establishment and Household Surveys have been falling. All things equal, fewer survey responses means less reliable data. This is especially true for the 1st and second estimates. So, when BLS releases its report on the first Friday of the month, it estimates jobs gained or lost in the prior month and then revises the two months prior to that.  From what I've seen, the 3rd estimate is "OK," because by then survey responses have rolled in. However, those 1st and 2nd estimates are pretty bad. The problem is the Fed tries to gauge the health of the economy in near real-time using the (very) unreliable first BLS estimates. This leads to big changes in the outlook when we get revisions as we did to May
AvatarElliott Gue
2:30
June payrolls. The fact remains, however, that for better or for worse the Fed is focused on these flawed BLS numbers and they appear willing to look through near-term upside in inflation on the view that's temporary. SO, they'll likely cut rates next month and (I suspect) a total of 3 times this year (75 bps). AT the same time, I just don't think the economy is weak right now. Claims data doesn't support the BLS numbers, we saw record travel demand this summer per TSA passenger data, I listened to a bunch of regional bank calls and we heard talk of a pickup in loan growth. Cyclical and small caps outperforming this month. So, if anything, I think the Fed is cutting rates into an economy that's still on solid footing for now.
Jeff B.
2:30
Hi Roger,

What MLP's do you feel will benefit most from the data center build outs?
AvatarRoger Conrad
2:30
Hi Jeff. Energy Transfer (NYSE: ET) already has some direct contracts to supply gas to data center development in Texas. Kinder Morgan (NYSE: KMI) also looks pretty well place to pick up some business. I think both companies' major development focus is going to stay on feeding LNG export infrastructure, however.

Gas is about 40% of power generation. So to the extent, AI increases demand for electricity, there will be demand for gas transportation. But I think longer-term, Big Tech still has a preference for minimizing fuel cost volatility. That means contracted nuclear and at this point heavy renewable energy plus storage.
Mr. G
2:36
What’s your latest thoughts on AEP and NEP
AvatarRoger Conrad
2:36
AEP shares look a little bit rich at this point. But the guidance boost last month is the best possible sign the company is hitting on all cylinders. And the expected boost in 5-year CAPEX to $70 bil--with 2030 new large load projections rising to 24 GW from the previous 21 GW--is a good sign that runway for investment led growth is expanding. I'd be a buyer on a dip under 100. For now, it's still good for dividend reinvesting.

NEP is now XPLR Infrastructure (NYSE: XIFR). The company is still majority controlled by NextEra Energy (NYSE: NEE). But it's basically gone to ground this year to slash debt. I was encouraged by what we saw in Q2. And I think the recovery plan is on track. But I would not expect a dividend for at least the next few years.
Sohel
2:39
Hi Elliot, What is the implication of a weaker $ for investments large foreign oils majors like TTE? Both from a price of oil perspective as well as impact on share prices/dividends due to weaker $.
AvatarElliott Gue
2:39
As a rule of thumb, a weaker dollar will tend to support global stock outperformance. Indeed, one of the big themes I've been covering in Smart Bonds this year is that it's also supporting strength in global bond markets and ETFs that buy global bonds without hedging currency exposure.

So, the S&P 500 was up about 10.3% YTD through Monday's close and VXUS (an ETF that tracks all stocks in the world excluding the US) was up 22.8% over the same time period.

The developed world ex-US corporate bond ETF I recommend in Smart Bonds is up 14.1% this year, the high yield corporate ex-US ETF is up 16.5% and the emerging markets govvies fund is up 13.3%. So, you can see that a weak US dollar -- that's been the case since mid-January -- lifts the value of all sorts of non-USD assets.
AvatarElliott Gue
2:39
However, I would caution that I don't think a weak dollar is a good reason to favor the big global oil majors over their USA peers right now. That's because other factors dominate the fundamentals for these companies and right now XOM and CVX both have superior production growth outlooks that the EU majors.
Phil B.
2:48
Dear Roger,

I see that Trump has ordered suspension of work on Orsted’s Revolution wind farm despite the project being 80% complete. I’d be interested to hear your thoughts on the implications of this action for how best to invest in renewable energy going forward. Many thanks for all your excellent advice over the years.
AvatarRoger Conrad
2:48
Hi Phil. I think it's likely the Administration is trying to strong arm the New England states to approve a natural gas pipeline. It tried the same thing in New York with the Empire Wind project this spring and about a month later approved restarting work--claiming they'd forced the state to debottleneck a gas project, which the governor denies. So I would look for the same outcome here.

Offshore wind projects are a good pressure point for the federal government because they're by their nature on "federal" land. There's a much higher bar for interfering with projects on private land. So at this point, I think the stocks we have with wind and solar investment are fairly well insulated.

I do think the kind of progressively more interfering government energy policy we've seen over the last 10 years or so raises costs. It's also a formula for extending the energy upcycle by suppressing supply--which will work to the benefit of companies that do have energy assets in place, and the stocks we own in CUI and EIA.
DRG
2:49
Hi Elliot and Roger, 
A Wall Street energy analyst recently commented that COP with its blend of short-cycle and long-cycle oil and gas assets and decades of inventory at a cost of supply below $40 a barrel is one of a kind E&P. The analyst suggested that E&P is in an excellent position to generate strong free cash flow even when oil prices fluctuate. 

Like to know your thoughts and any reason why the stock doesn't make the cut for inclusion in the EIA"s Actively Managed Portfolio. Thanks.
AvatarElliott Gue
2:49
We used to recommend COP but sold it from the portfolio some time ago. That ended up being a good decision as COP has underperformed the broader S&P 500 Energy Index since late 2022.

We think there are better positioned names right now. . There are plenty of producers of all sizes with production costs that are similar to, or arguable superior to, COP. XOM and CVX are two examples. XOM shoots for production costs across its portfolio in the $30s and the stock, while rangebound of late, has outperformed COP and the broader S&P 500 Energy Index since our recommendation. XOM also has a blend of short-cycle (shale) and long cycle (conventional projects like Guyana).
AvatarElliott Gue
2:49
Moving down the cap scale, Permian Resources (PR) is an example of a low cost oil-focused producer with inventory in the core of the Permian and a low all-in breakeven cost. PR generates significant free cash flow even at current prices and has a peer leading dividend of 4.5%, more than 1% higher than COP.  SO, I'm not saying COP is a bad company or that it won't be a good long-term holding but I'd hardly call it "one of a kind"  and I think there are just better names right now.
Frank D.
2:53
Thanks for your good advice over the years. Is Expand Energy (EXE) the best play for investing in the future of natural gas or do you like something else?
AvatarRoger Conrad
2:53
Hi Frank. Expand is a great company with a lot of room to drive costs lower--as we saw them do in Q2. It's not the only one--and we've been focusing our recommendations in Energy and Income Advisor on companies with similar strengths. The best idea would be to try to own several of these companies. They're becoming increasingly valuable as they drive production costs and debt lower--and when energy prices rise again, they're going to generate a lot of free cash flow to pay us dividends and buy back stock.
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