JotCast | February 2026 Capitalist Times Live Chat

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February 2026 Capitalist Times Live Chat

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Elliott Gue

2:43

I covered this question just above.

Monroe J.

2:44

Hi Roger, what is your opinion of Upbound? Big dividend, growing earnings.

Roger Conrad

2:44

Hi Monroe. I actually did answer your question on Upbound from the email at the beginning of the chat. There seems to be a lot going right there and I've added it to my watchlist--there is some exposure to affordability concerns. And if the economy slows, the Rent-A-Center business could be hurt. But guidance for 2026 includes strong dividend coverage. And though they didn't raise as they usually do to start the year, a boost later in the year is possible if they meet guidance.

Susan P.

2:52

Roger highlighted Simon's strong 5 yrs since covid but cautioned re its valuation. In the same Jan reit report, both NNN and Kimco seemed to have had good 2025's and convey decent guidance.. Is it crazy to think they could mirror, even just minimally, Simon's performance going forward? Do you have thoughts as to which of these retailer reits are better buys at this point in time?
Finally, a quick clarification on how the highest buy-in price: "a price where the sum of dividend yield plus the expected annual growth rate is greater than 10 percent." Are you referring to the annual growth in distributions, earnings, AFFO, and/or possibly even the capitalization rate? (e.g., NNN cited a 7.4% cap rate on new leases).
Thanks for that clarification and answer re the NNN & Kimco v.v. Simon.

Roger Conrad

2:52

I think Simon has received a bigger boost than NNN or Kimco in part because it's a larger company and has greater exposure to major market ETFs--as do Prologis and Welltower in the REIT sector. I think if anything, it's business of relying on retail mall tenants is more cyclical than Kimco's--which is grocery store anchored. NNN's key strength is diversification. And unlike Simon and Kimco, it raised rather than cut its dividend during the pandemic year (2020). I think both KIM and NNN are being held back by concern another slowdown lies ahead. But I think both could certainly get the kind of run Simon has at some point--unless they're taken over first. And NNN and KIM are both still buys.

As far as settling REIT buy in targets--it's basically the same idea as I have in CUI: The relevant measure of profit growth plus yield. Dividend growth over time tends to follow earnings. For C-Corps, I used EPS excluding special items. For REITs, it's adjusted FFO.

Roger Conrad

2:54

Cap rate is a great way to gauge value of individual properties. And you always want to see that number heading in the right direction when a REIT owns a property and eventually sells it, But it's tough to have a meaningful overall number for a company that owns hundreds or even thousands of properties.

3:01

Does DNOW have a fit in our infrastructure Buildout?

Roger Conrad

3:01

I wouldn't consider DNOW an infrastructure company per se. The merger with MRC Global expands its capabilities, especially in North America. And there are multiple sectors that buy its products--including companies considered infrastructure: Energy midstream, mining, power generation, chemicals processing etc.

But DNOW is best considered a maker of products used by these companies--which is a far more competitive and cyclical business. It also doesn't pay a dividend.

Kerry

3:02

I see that CRK is now the biggest bargain in the E&P Portfolio. What do you think of it?

Elliott Gue

3:02

We don't recommend Comstock (CRK) in the model portfolio though it's a name we like and do recommend in our trading service, CT Trader. CRK has seen a ton of volatility due to the weather-driven shifts in natgas prices over the past month and a half because it's a Haynesville gas producer that sits on the higher end of the cost curve relative to the gas E&Ps we recommend in the model portfolio (EXE and EQT). Right now, as we wrote about in today's issue, our view is that gas fundamentals are pretty supportive -- strong LNG export demand and Mexican exports, restrained production. So, we see the gas names as good buys here. If you're looking for a longer-term holding, EXE and EQT are our top picks. If you're looking for leverage, CRK is a good vehicle.

Jimmy

3:05

Is the dividend that AQNB pays sustainable?

Roger Conrad

3:05

Hi Jimmy. I think all of Algonquin Power & Utilities' (NYSE: AQN) preferred stocks' dividends are safe, as are its bonds. The company is moving on a multi-year financial recovery plan that should eventually return it to dividend growth. It has substantially shed everything but its regulated electricity, gas and water utilities--as well as a great deal of debt. And I expect to see substantial progress confirmed reducing rate lag, increasing utility CAPEX and cutting debt when they report Q4 results March 6. I'll have full analysis in the March CUI (posting date Mar 9).

Don

3:18

Roger

With the AI companies now building their own power plants instead of relying on existing utility companies power plants does this alter your view on the strength of the utility sector?

Regards.

Roger Conrad

3:18

Hi Don. Not at all. Utilities are still increasing CAPEX plans, which means they are still getting as much new business as they can handle. And they're increasing earnings growth guidance in tandem. The long-term value proposition is if anything continuing to get stronger.

As for AI companies and data centers, building onsite power is nothing new. In fact, Q4 results and guidance show it's still a huge driver of growth at companies like Brookfield Renewable and NextEra Energy. The preferred arrangement is a grid connection plus onsite power operated by a third party under contract.

As for data center owners becoming their own power companies, the media is always wound up by disruption themes. But end of the day, any that do are likely to regret taking on the risk rather than just signing a contract with a power company--as so many cogenerating industrials did a generation ago. Running on nat gas at $3 is an entirely different matter than trying to do it at $6.

Dan P.

3:23

Thanks for the chats and all of the insight you both bring. My question: We used to park cash at VWITX. Is this a good time to return, for some or all of cash?

Thanks again

Roger Conrad

3:23

Hi Dan. i think Vanguard Federal Money Market is about as good as it gets for a cash alternative. Your principal is safe from almost any conceivable economic event. You can get at your money anytime. And the monthly yield is competitive with anything out there with similar low risk.

I do think money market yields are likely to go lower--as the Fed pushes the short term rates it influences lower. And you'll never build real wealth sitting in cash. But while VMFXX doesn't yield 5.5% or so as it did two years ago, it's a good place to keep some fund--especially for income investors that periodically have to tap their accounts for cash.

Kerry

3:29

Hi Roger:

I just bought some more Rayonier Inc (RYN) around $21 per share. It's near it's 52 week low. What's your outlook for RYN?

Roger Conrad

3:29

Hi Kerry. They're a very well run timber company. I like the move to sell the New Zealand operation and concentrate on the US--particularly at this time of supply chain disruption and tariffs. And as a long-term holder, you received a $1.40 dividend in late December--a pretty good return on a stock that's been trading pretty consistently in the low 20s.

Timber companies are cyclical--they produce a commodity product and earnings move around with demand and pricing. A big driver of demand is housing--and the market in the US has been soft. But Rayonier is resilient in weak markets and will be a huge winner as the cycle turns higher--while paying generous (though variable) dividends along the way. I think it's still a buy for patient investors who can live with the volatility.

Randy H.

3:32

Roger,

Thanks for holding these chats.Looking to make a new investment in a REIT and considering either STAG or RYN. Are there any issues that make one clearly better than the other?

Roger Conrad

3:32

Thanks for joining us today Randy. i just answered a question on Rayonier. STAG is a solid industrial REIT coming off strong 2025 results when they beat guidance. I generally consider Prologis the best in class in the industrial REIT space. But STAG is a buy at 40 or less. The industrial/logistics sector--along with SHOP--has been gaining strength over the past year. And it looks like 2026 will be another good one.

Sohel

3:36

Hello Elliot, I see lot of people speculating XOM is $1T company ... any thoughts on that? Drives an estimated $240 price based on shares outstanding.

Elliott Gue

3:36

I think XOM will likely be a $1 trillion+ company in the next few years.

I think about XOM today a bit like Walmart (WMT) a few years ago. Both undeniably great American companies with long histories. But, for a very long time, the narrative in WMT was that the company was a loser, disrupted by technology...hopelessly behind the times. WMT traded at about the same level in the autumn of 2015 than it did in the autumn of 1999. Even in late 2023 when I added it to the Creating Wealth portfolio, the narrative was that Ozempic (the weight loss drugs) were going to kill WMT's business because people weren't going to buy as much snack food. Well, as is so often the case, all these narratives about "disruption" were complete BS. Listen to WMT's call earlier this month and, yet again, WMT's online business is growing at a rapid clip, they can deliver same day to more than 95% of the US population and they're attracting a much wealthier clientele than they did a few years ago. They're using AI in a huge way to cut

Elliott Gue

3:36

costs and boost margins -- they weren't disrupted by technology, they benefited from it. On February 3, 2026, WMT joined the $1 trillion club. I was listening to Exxon's call late January and it strikes me that not long ago the narrative there was that oil and gas were dead and that XOM was investing in "stranded assets" by putting CAPEX into the Permian and Guyana. Turns out, they now have their hands in most of the world's lowest cost projects and are growing production while companies like BP are scrambling to undo their renewable energy investment disaster from 2019-2022. And XOM IS a technology company. They are leveraging their treasure trove of global data on energy projects to continuously find ways to squeeze out costs, reduce emissions, improve efficiency and generate free cash flow. Like WMT, XOM went absolutely nowhere for 15 years from 2007 until about 2022. It's now breaking out and, to be honest, I think $250 is a conservative long-term target in an energy supercycle scenario.

Sohel

3:40

Hello Elliot, Some chats ago you had thought that VLO would in the 200 range, we seem to be there now. What is your current outlook on VLO ... does it stand to benefit in a big way with the Venezuela situation and/or is that already priced in? Do you have a new price target? Seem quite volatile with pretty large daily swings indicating there are competing view points on the outlook perhaps? Thanks for holding these chats.

Elliott Gue

3:40

I think the immediate Venezuela uplift is priced in. What is not priced in, in my view, is that refining margins are likely to remain elevated for years to come as their is insufficient global capacity to meet rising demand. In particular, i think VLO's complex refineries located on the US Gulf Coast are essentially an irreplaceable asset -- you could never permit and build a facility like that today and even if you did it would be very expensive. This strategic location gives them preferential access to both supply and export markets. So VLO might be a bit extended near-term, but we continue to see it as a buy on dips because I see significant longer term upside.

Alex M.

3:50

What do you gentlemen think of the asset management space right now? Specifically, names like ARES, OWL, and APO. Opportunity at these levels or trouble ahead? Thanks.

Elliott Gue

3:50

Personally, I see the whole private credit "cockroach" and SAAS-apocalypse software narratives as overdone. OWL has been facing elevated redemptions for its private credit funds, probably because of all the bearish headlines out there late last year. One of the features of these funds is that you're generally limited as to how quickly, and/or how much, you can redeem at any given time. That's because these investments aren't liquid like a publicly traded stock, so fire sales can unduly depress prices. So, OWL sold a significant chunk of its assets at 99.7% of par value to fund redemptions over the next 45 days. They are actually allowing investors to redeem more of their investments under this new system than under the old system. Further, while some software stocks will see headwinds from Claude Code's (AI) new functionality, I find it hard to believe that "vibe coding" with AI will sound the death knell for all software companies. The situation is ugly and panicky right now, so I am not recommending stocks

Elliott Gue

3:50

like ARES and OWL right now. However, I do think some of the BDCs -- basically publicly traded private credit -- offer some opportunities. I have recommended a small position in ARCC (managed by ARES) in my Creating Wealth/FMS portfolio and I have a small position in the BIZD ETF in Smart Bonds (both added when these stocks were well off their 2025 highs). For the most part the actual loans to software companies in the BDCs are relatively low duration and I believe the risk of a wipeout on a significant portion of these loans is far lower than the market panic would suggest. I'd not recommending a large position in either portfolio and in Smart Bonds I'm not adding any position to my Defensive portfolio. However, the state of this panic seems a little overdone to me and is overstating the deterioration in actual fundamentals by a good bit.

Lou E.

3:51

Hello, Roger,

Thanks for years of valuable advice.

I am looking into making some small investment(s) in corporations that show significant promise of one day providing SMRs to AI providers. Possible contenders include NuScale Power (SMR), NANO Nuclear Energy (NNE), Westinghouse via Brookfield (BEP) and Cameco (CCJ), and Rolls-Royce. There may be others that I am not aware of. Realizing that this is a particularly speculative field, please offer your thoughts on how to best approach my objective. Would a "basket" of all or some of these issues be wise, or do you feel that certain of these, or other, potential providers appear to be advantaged?

With gratitude.

Roger Conrad

3:51

Hi Lou. Thank you for that high praise.

Unfortunately, I think if anyone were looking for the next Solyndra, small SMR companies are the top candidates in energy. Uncle Sam and Big Tech are literally throwing money at them--and utilities are potentially receptive. But it's highly unlikely there will be a commercially available--let alone competitive--design available in the US this decade. That means even the companies that win the competitive battle to get an accepted model to market won't have real earnings for years--if ever, other than what they classify as such from federal subsidy.

Other warning signs include Fluor's firesale of its stake in NuScale Power Corp, which it expects to exit entirely by mid-year. That's after SMR has dropped -75% since early October. OKLO shares are down roughly -60% over that same time frame, despite the company's connections to the DOE secretary and a much hyped contract with Meta in Ohio.

If you want to bet on SMRs or new nuclear in the US, Brookfield Renewable owns 51%

Roger Conrad

3:53

of Westinghouse. That company has more support from the US government than anyone--both for SMRs and large scale AP1000s. But BEP is also not a one trick pony--you have a massive business generating rising cash flow with 10% annual growth. If the nuclear works, BEP will double or triple from here. If not, you're still going to do quite well and get a big dividend along with way.

3:55

I do think the current fleet of nuclear plants is only going to become more valuable over time. And there are candidates for reopening plants that will deliver big gains for their owners--as Constellation's Three Mile Island 1 and NextEra's Duane Arnold will later this decade. And I think eventually we'll more large and small scale nuclear in the US--Vogtle from all accounts is running very well as a first mover of the AP1000 in the US.

3:57

But right now, new nuclear can't compete with new solar plus storage and especially natural gas. And until there's a commercial design a utility can take to regulators and investors and present a firm cost and time estimate, there will be no orders, at least not without extremely heavy taxpayer subsidy.

Robert B.

4:02

In CUI in the past, i believe the conservative and aggressive portfolios were updated biweekly. and they were available as csv downloads from the website. you appear to have stopped this service and i have had great difficulties in downloading them from the newsletter. am i right that you changed this benefit of newsletter membership? if so, may i ask you to reconsider? thank you.

Roger Conrad

4:02

Hi Robert. No, the Conrad's Utility Investor portfolios have always been updated with the monthly issue--never in between.

You can download a csv and/or pdf copy of the Utility Report Card from the website now by clicking on the "Current Issue" button and then for the file you want. Those buttons are at the bottom of the issue menu/table of contents.

If you're interested in a current csv of the model portfolios, we're happy to send you those.

Mr. G.

4:08

What's your latest opinion on AES, the present and future?

Roger Conrad

4:08

Hi Mr. G. I'll be able to offer you a more extensive answer on AES after they announce earnings on Feb 27. And I will have analysis of the company and other companies reporting since the Feb issue posted on March 9--when the March issue of CUI posts.

With that caveat, I continue to believe there's tremendous value here. The stock got a lift when takeover rumors surfaced last year and then resurfaced this year with Blackrock the suitor. But the 20-year contracts reached with Google in Texas and announced this week are just the latest confirmation AES is a preferred power provider for Big Tech in the US. And as they prove their model doesn't depend on tax credits, I think this stock goes higher all on its own. Still trading at just 7.5X earnings.

4:18

Hi Roger, BHP has had a strong run up in its stock price, hitting $82 today. At what price level do you see BHP being fairly valued and would consider taking some off the table? How much further up do you think this stock can go? Also, any recommendations on WDS stock that BHP spun off?

Roger Conrad

4:18

Hi JT. The NYSE-listed ADRs for BHP--which are worth 2 ordinary Australia-traded shares--are now above my highest recommended buy price of 75. That's quite a lift (up 68% in 12 months) from where it traded for quite a while. I think a good bit of that is coming from the strength in copper prices this year--and as with BHP's other major products (iron ore), the strength of the Chinese economy is very important.

That said, I think this stock has more room to run as the materials/commodity market continue their cyclical uptrend. The company is about of become a major producer or another critical commodity--potash--as the Jansen mine starts up. It's putting the Minorco dam disaster behind it. And multi-year cost cutting/balance sheet strengthening is in full swing.

I think if the stock did hit 100 I would sell a chunk. And I may next months when I put CUI Plus together, depending on how things stand. But I like BHP for the long term.

As for Woodside Energy, I think you want to hold onto it.

Roger Conrad

4:20

We do track Woodside in "Canada and Australia" in Energy and Income Advisor.

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