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February 2026 Capitalist Times Live Chat
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AvatarRoger Conrad
1:43
Hello everyone and welcome to our Capitalist Times February Live webchat!
1:44
As always, there is no audio. Just type your questions into the chat box and we'll get to them as soon as we can comprehensively and concisely. We will send you a link to the transcript of the complete Q&A tomorrow morning in case you have to leave before your query is answered.
1:45
As always, we're going to start with some questions we received via email prior to the chat. Thanks again for participating today. We look forward to your questions and comments.
Q. Of all your services and publications, which one has the longest and best
profit track record? Or even your top three?—Eric F/
A. Hi Eric

I hope this doesn't sound like a cop out on your question. But they
really do different things. Energy and Income Advisor and Conrad's
Utility Investor highlight our research on sectors Elliott and I have
covered for many years--and "performance" is going to reflect sector
trends as well as stock selection. We do publish numbers every year
for annual performance in the January issues of each. And past issues
are archived on the websites.
1:46
You can also look at the portfolios,
which track returns since each position was recommended. Elliott also
does Smart Bonds and I do the REIT Sheet--same performance of
recommendations data is provided. I have an income-focused managed
portfolio product "CUI Plus" and he has "Free Market Speculator,'
which is a managed growth portfolio. We also have CT Trader, which is
a trading service.

I think the better question to ask if you're thinking of buying just
one of these advisories is what works best for you. All of them have a
long history of beating their relevant benchmarks--for EIA it's
various energy indexes and ETFs, for example. For REIT Sheet, it's
real estate investment trusts etc. But some of these advisories focus
more on current income and portfolio stability. And some of them are
more concerned with capital gains.

We also offer many of these products in one form or another on the
Substack platform. You can search those under our respective names.
Mine are under the "Dividends Roundtable" name
Substack allows us to
get our research out to a wider range of people that the old
investment newsletter channels no longer do.
Q. Hi
I have often questioned the math on this. A royalty company that I own is buying "Royalty Acreage" in the Midland Basin of the Permian. Since the volumes drop off pretty quick (60% first year and 70% by year 5) how do they make any money with a royalty asset that is depleting this fast? It's like looking at a new car and the car dealer telling you after year 5 the car will only perform at 15 miles mph. Would you buy that car? LOL
Frank F.
A. Hi Frank

The math of royalty companies is really all about commodity prices.
First, the reserve "life" on which depletion projections are based
depend on drilling economics. Mainly, at lower oil and gas prices, no
one is going to produce harder-to-get, more expensive hydrocarbons
that they would at higher commodity prices. So, the same reserve will
have a lower "life" estimate at $50 per barrel oil than it will at
$100 a barrel.

Second, royalty company profits are determined by (1) how much is
produced on their lands by third parties and (2) what the realized
selling prices are. Both increase when commodity prices rise. And both
decrease when prices drop.

Bottom line: Royalty land purchases aren't a bet on steady state
energy prices--but on a future spike. And if that happens, those
depletion rates you're seeing now are going to be a lot lower and
reserve life higher. More important for royalty trust investors, the
value of these lands and the income from energy produced there are
going to skyrocket from where they are now. That means a lot of cash
flow and capital gains, depending
1:47
of course on the buyers making an
accurate assessment of what's in the ground and not overpaying.

A very good case in point is the history of the former BP Prudhoe
Bay--which was deemed depleted in the 1990s, only to gain a decade of
additional life as oil and gas prices rose during the '00s. The share
price rose 10X over that time and the dividends nearly as much, before
energy prices came down and reserve life cratered.

Is what your friends are doing a good bet? We think prices are going
to be moving in their favor in a big way. The question is whether they
know what they're doing--what exactly they're buying a royalty
interest in and whether or not they're getting a good price. But this
kind of thing can be a moonshot
1:48
if the answer is yes to both
questions.
Q. Hi Roger,

I hope this message finds you well. Just back from FL where I suffered from
the flu and froze down there with the cold weather. Back in SC happily.

I came across the attached article in my pile of newspapers that I missed
while away. The article is from the WSJ Op Ed section and discusses
Dominion's CVOV.

The article seems to take a position 180 degrees opposite of yours regarding
the offshore wind facilities. I would be grateful for your counter
regarding Mr. Gluck's comments.

In my estimation this was a huge mistake to undertake CVOV project in
combination with the sale of their midstream assets to Buffet.

Had they not endeavored to build CVOV and kept the midstream business the
stock would be trading above 100 now more in line with DUK and the dividend
would be higher.
As a D ratepayer in SC I hope they don't sneak in CVOV's costs into my
electric bill.

On another matter my utilities and midstream holdings have been trading
(upward) like the Magnificent 7 this past week. A melt up?

I speculate it has to do with the Trump administration's abandonment of
Obama's EPA energy related mandates.

Anyway, I'm up to date on EIA and Utility Investor issues. Recently became
life member of EIA in addition to Utility Investor.

Kind regards,

Jim C.
A. Hi Jim

Sorry you had a rough go of it lately with this weather. I still have
sheets of ice in my yard from the sleet storm a couple weeks
ago--ready for spring.
1:49
For the past decade or so, Dominion has been in the less than enviable position of operating in a state controlled by the opposite party from the federal government--in an era where both Republican and Democrat politicians are stepping up involvement in the energy business. I actually think despite everything they've done a very good job of navigating their way through it. The recovery plan is on track and I think we'll see dividend growth return the next couple years.

I say they've done a good job for a couple reasons. First, in the February issue of CUI I highlighted a table of what's happened toelectricity rates in states the past five years. And offshore wind going into rates and all, electricity rate increases in Virginia and especially South Carolina the past five years are both well below the national average.

What really jumps out to me from this data is all 14 states where electricity prices have risen faster than the national average "deregulated" during the 1990s--the regulated utilities
1:50
operating in those states are operating the wires only and do not produce electricity. I think that's about to change in Pennsylvania at least and others may follow. But if you're looking for the real underlying reason why power prices have risen so dramatically in certain states, it's that there are no power plants in utilities' regulated rate base. And rather than utilities and regulators managing systems on the state level, we have quasi-government officials trying to run regional grids and dealing with the individual production decisions of dozens of companies--who have no obligation to serve anyone but shareholders.

This is a very well written Wall Street Journal editorial. But it's written by someone advocating a position--and in this case, it's the Trump Administration's animus toward wind energy. And like all advocacy "journalism," it presents the facts it wants you to see, and ignores those that undermine its main points.
1:52
In the case of the Coastal Virginia Offshore Wind project, Dominion was put through its paces. As the piece points out, the Virginia energy law passed by former Governor Northam's administration did
mandate increased use of renewable energy, including wind. But former Governor Youngkin's administration and the Republican-controlled
legislature forced a number of changes to the original agreement . And the result is cost recovery is capped for the project at $10.8 bil. The company further reduced the risk to Virginia ratepayers by finding
a 50% private capital partner in Stonepeak. The utility has been recovering the cost in rates as incurred as a rate rider, which will go away when construction is completed. Stonepeak has covered 50% of
the cost to date and will do so for overruns until the total project cost reaches $11.5 bil--the current estimate including the impact of the tariffs and the Trump Administration's stop work order.

The fact that former Governor Youngkin and his Republican AG were strong
1:53
supporters of CVOW is not really addressed by Mr Gluck. Neither is the fact that Virginia's entire Congressional delegation supports the project. And neither is the fact that Dominion was able to
convince a deep-pocketed private capital firm Stonepeak that the project was worth investing in--to the tune that when they bought in they repaid Dominion for everything the utility had spent so far and
agreed to take on cost overruns up to 20% more than project value.

CVOW is a first mover project--the first major offshore wind facility in the US built by a regulated utility. And if you followed Southern Company's Vogtle project in Georgia, you're well aware first movers pretty much always exceed initial budgets. The two new nuclear
reactors at Vogtle wound up costing twice the initial forecast--not Southern's fault as the lead contractor Westinghouse went bankrupt and defaulted on what had been a fixed price contract.
1:54
The initial cost of this project was $9.8 bil and it's currently projected at $11.4 bil. The Youngkin administration in Virginia put limits on costs and Dominion has generally stayed below them to date. The boost in all-in costs from the previous $10.5 bil is entirely due to actions taken by the Trump Administration: The stop work order that lasted about one month before the courts overturned it and tariffs, especially the 50% levy on steel imports that domestic manufacturers have raised prices to reflect.

Will CVOW work as Dominion thinks it will when it gets up and running this year? That will be a test. But these machines do operate very cost effectively around the world, when they're intelligently integrated into the grid. And we have energy federalism in this
country--which means utilities in other states can learn from this project, and decide if they want to build one. It looks like Dominion is building gas and solar in South Carolina. But in any case, what the company spends in VA stays here--trying
1:55
to push costs onto SC would not be worth it considering the firestorm your politicians and
regulators would create.
 
Q. Hi Roger, I am a long time follower and go back to your previous publication and subscribe to 4 Conrad/Gue offerings. My question is Upbound a prospect foe a dividend stock to buy. The numbers I see look pretty good.....earnings are recovering.—Monroe J.
A. Hi Monroe. Thanks for writing and for being with us.

I haven't looked at Upbound up to now. The yield is attractive. Just reported Q4 results were solid and the dividend was well-covered. 2026 guidance is $4 to $4.35 per share, which would cover the payout well even at the low-end of 2025 adjusted
earnings per share guidance. They did not raise their dividend in advance of Q4 results, which is when they’ve announced boosts in the past. I do think this is a business model more affected by the "affordability" concerns we see affecting various industries now. And there are a lot of moving parts here as well, particularly with the close of
the Brigit acquisition. And conglomerate models aren’t usually popular with investors. But I’ve put the stock on my watchlist. Thank you for bringing it to my attention.
Q. Roger: I was surprised to see BEP as an "aggressive" focus stock. It has done well since your "conservative" focus in Feb 24. Comments attached. Regards, Bill W.
A. Hi Bill
Please don't read too much into this, Brookfield Renewable is only aggressive in comparison with Essential Utilities, which is about as conservative as it gets. It has an A rating as is a top recommendation.
 
Sometimes, the two stocks I want to feature in a given month are both going to be from the same portfolio.
 
 
 
1:56
That's all I have from the prechat emails. If yours didn't appear, please re-enter it and we'll answer it during the chat. Now let's get to some live questions!
Susan P.
2:05
Roger referenced Blackstone may take its Blackstone Mortgage REIT(BXMT) private; American Tower potentially being a bidder for Crown Castle; and I have read that Americold has seen buying by an activist firm (Ancora Advisors). Despite certain reits recent improving returns, do you foresee more overall M&A activity in the space on low valuation reits? If yes, which ones might benefit from some kind "bidding wars" taking their prices higher--if outbidding in this space is even common?

Finally, W. Buffet initiated a position in Lamar Advertising (LAMR) last year. It's not on your REIT Sheet but wondering if you have any thoughts on?? It did not escape Covid's impact but the distribution has been increasing since then, with special div/distribution issued every year 2021-2025. Thank you.
AvatarRoger Conrad
2:05
Thanks as always for your questions Susan. The valuation gap between properties held by private capital and other entities and REITs has been elevated since the sector started underperforming in 2022--with the Fed raising interest rates. I think you are seeing some narrowing of the spread--and that's increased interest in taking REITs private. Elme Communities--formerly Washington REIT--is basically liquidating, selling its pieces and distributing proceeds as dividends. And a number of REITs have announced strategic reviews that could end in the same, or at least substantial asset sales.

The other side of the equation is REITs' cost of capital has been higher than private capital's for a while. That's why we're seeing Realty Income (NYSE: O) and others take on private capital partners.

I think if there's a perception the valuation gap is narrowing quickly--REIT share prices rising--then we could see more outright offers. And the best way to position to take advantage is to buy the REITs you'd want to own
AvatarRoger Conrad
2:07
if they remained independent indefinitely. The history of private/public held property discounts is they do eventually reverse. So with a well run REIT, you're going to get that benefit of a rising valuation whether there's a deal or not.
2:11
I don't know Lamar Advertising. But I did recommend Outfront Media (OUT) last year with good results as market conditions improved, which appears to have been the case for Lamar. Lamar is a much larger company and potential acquirer of Outfront in fact. Thanks for bringing the company to my attention. I'll consider adding to REIT Sheet coverage.
Jason D.
2:17
Roger, Elliot,

I don't know if you follow Calumet CLMT, a specialty oil refiner MLP. It suspended the distribution many years ago (about 5-10 ???) and the stock turned south. In the past year, it has more than doubled and now is near a many year (perhaps all time) high at about $30/share. Can you comment on the status of this company as an investment now. The market seems upbeat on it. Is this the time to get out or do you think we will see higher prices, Will it return to distribution payout in the future? What is driving the recent rise in the past few months?
AvatarRoger Conrad
2:17
Hi Jason. We have recommended Calumet in the past and continue to cover it in our "MLPs and Midstream" coverage universe in EIA. I think the stock is benefitting from the uptrend in refiners that's also catapulted our model portfolio pick Valero higher recently. Calumet is going to report Q4 results and update guidance on the 27th. I would expect to see margins for most products show strength, with the exception of renewable diesel. As far as a dividend, management's priority the past few years has been cutting debt. And their success is key to their recovery. This is also a highly cyclical business. So if you're looking for yield, the price recovery is probably a good time to move onto something with a yield now.
Frank
2:18
In EIA you have MPLX on one list as buy under $55 (high yield), on another listm (actively managed) it is buy under $50. Which is it?
AvatarElliott Gue
2:18
MPLX should be listed as a buy under $55 across all the portfolios.
JVA
2:23
Thanks, you guys for making time to conduct these sessions. Still like FLEX? Any update on their business performance?
AvatarElliott Gue
2:23
Yes, I still like FLEX and recommend it in the Creating Wealth/FMS model portfolio. Their data center business remains strong and is supported by strong demand for Google's TPU based systems. In addition, some of their other divisions, which have been weak over the past year, are starting to show strength -- medical devices is an example they covered on their last call. FLEX is trading just off an all-time high; however, I think we could see a new leg higher amid broader market strength later this year.
James G.
2:26
Electric and gas utes have certainly enjoyed a bit of a run over the last 2-3 weeks. Whether it is due to AI avoidance, rotation out of AI to infrastructure and rotation to other sectors or just a risk-off move, I do not know. but the ride has been nice. Could you dissect the recent action in the ute space and possibly posit why the utes have suddenly become popular?

Also, does the Energy/Income pub cover DT Midstream? It has had a major run to the upside over the past few months but will give some of the run back this week as I believe it has gotten ahead of itself, and the divvy raise effects have "worn off".
AvatarRoger Conrad
2:26
Hi James. Utilities' rally of the past few years basically began in late 2023, when the Fed announced it would begin reducing Fed Funds. That reduced concerns still higher borrowing costs would derail CAPEX-led earnings and dividend growth guidance. And by early 2025, utilities were catching AI "picks and shovels" fever.They're also benefitted from increased popularity of dividend stocks in general and rotation out of the 7 Big Tech stocks--though that's only just getting started. Against those tailwinds are headwinds from still higher for longer borrowing costs and growing affordability concerns--which are an election issue this year, demonstrated by the Georgia election in November where 2 Republicans lost PSC seats by 2-to-1 margins.

I think the tailwinds are still very strong for the long-term. Short-term, though, this is a time for careful harvesting of the more extended names--as I've been doing in Conrad's Utility Investor.

We do cover DT Midstream in EIA--MLPs and Midstream coverage universe.
AvatarRoger Conrad
2:28
DTM is a strong company. But I agree it's become pretty expensive, as have the other major C-Corp midstreams. Best in class MLPs are a far better buy now--yields 4 to 5 percentage points higher and tax advantaged, definitely worth filing the K-1s if you're buying these stocks for income.
Phil C.
2:33
I have read there is about 6 billion barrels of crude oil in storage globally including China and US SPR volumes. Also read there is a currently production oversupply of about 2.9 million barrels EIA Feb 2026. Do these numbers make sense to you? Crude Oil Futures curves are about $4 per barrel lower going out a few months. Excluding the geopolitical conditions, and considering fundamentals, should we expect near term weakness in E&P and IOCs? What is your expectation going forward? Thank you.
AvatarElliott Gue
2:33
As I wrote in the issue out earlier today, we don't put a lot of stock in IEA and EIA projections. Both organizations (particularly IEA) have been forecasting an imminent glut of oil for several years and were forecasting a glut of 4 million barrels per day in Q1 2026 as recently as 3 to 4 weeks ago. Obviously we're not seeing anything even close to that with the quarter now more than half over and commercial in the US and globally below the seasonal average. In 10 of the last 13 years IEA has underestimated global oil demand and they typically revise their estimates higher 4 to 5 times a year. In addition 6 billion barrels, while it might seem like a lot, is less than 60 days of global demand and much of that is locked into startegic reserves in the China and US; both countries are generally filling their reserves amid the current low price environment, which adds support for price.  Finally, I'd note that the futures market condition you've observed is what's called "backwardation," which is generally
AvatarElliott Gue
2:33
bullish crude as high current prices is the market's way of communicating that the global market needs more oil to come out of storage. While it's unlikely to be a smooth line higher my view is that we've seen a bottom in oil and energy stocks and we're in the early stages of the next phase of the supercycle. Some of these stocks have run, so I don't think we should be surprised at the occasional 5% to 10% pullbacks along the way, but that's my view based on supply/demand conditions. Geopolitical headlines are irrelevant except in the very short term.
Jason D.
2:39
I notice that at least on the utility site, the list of covered stocks, which includes a recommendation for each is no longer present (I think it was called the coverage universe).

Question 1: * Is that list (the coverage universe) still available?

Question 2: As far as Suburban Propane is concerned, I think its been a colder than normal winter this year which means higher usage of gas. Can you comment on your recommendation of this MLP in the current market? Also I think UGI is in the same market. 

Which of these or other related ones do you think will do best? 

Specific to SPH, do you thing they will ever return to growing the dividend again?
AvatarRoger Conrad
2:39
Hi Jason. You can download both a csv file and a pdf of the complete Utility Report Card from the Conrad's Utility Investor website by clicking on the "Current Issue" button and then the button for the version of the table you want. That's directly under the issue table of contents.

We've made changes to the website to make it easier for everyone to use. And we welcome your comments.

As far as Suburban growing its dividend again, I think management will continue use free cash flow after the current payout level to pay down debt--rather than increase the dividend. I raised the buy price because the dividend and balance sheet cushion improved with successful cost cutting and scaling efforts--the FYQ1 was actually not helped by weather. It may be in FYQ2 (end March 31). But its the scale and lower costs that are going to make SPH more resilient and worth owning.

UGI is also also covered in Utility Report Card. It owns Amerigas, which like SPH distributes fuels/propane. I have recommended it at lower prices.
AvatarRoger Conrad
2:39
I think SPH is the better buy now for income. Both are also possible takeover targets.
Paul M.
2:43
Any current thoughts on Venture Global (VG)?
AvatarElliott Gue
2:43
No change since we wrote about it in late January. Basically, we believe the base business is very sound -- they're ramping up new LNG export facilities faster than expected. The overhang on the stock remains the pending decisions on several cases against VG. The first is likely to be Shell's efforts to overturn their loss at arbitration against VG in the NY State courts. That decision in pending and likely by March or April. The Judge in that case sounded a little skeptical of Shell's claims in the hearing and it's unusual for an arbitration decision to be overturned, but obviously there are no guarantees. Then we have a handful of additional arbitration decisions pending later this year and a decision regarding the award associated with BP's arbitration win against VG last year. The stock got a huge boost when it prevailed at arbitration against Repsol in January and, should the NY State decision and additional arbitrations in this case also go in VG's favor, we'd expect additional derisking.
Paul M.
2:43
Any current thoughts on Venture Global (VG)? Thank you!
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