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March 2026 Capitalist Times Live Chat
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AvatarRoger Conrad
1:44
Good afternoon everyone and welcome to our Capitalist Times live webchat for March. We're looking forward to a lively session today and appreciate your participation!
1:45
As always, there is no audio. Just type your questions into the chatbox and we'll get to them as soon as we can comprehensively and concisely. We will continue so long as there are questions in the queue, just as we always do.
1:46
Tomorrow morning, we will be sending all CT members a link to the transcript of the complete Q&A. And of course, if your question isn't fully answered for any reason, you can drop us a line at service@capitalisttimes.com
1:47
We'll start today with answers to questions we received prior to today's chat.
Q. Good morning Roger - thanks again for hosting these chats.
 
Brookfield is buying out Boralex for a ~30% premium. In general, what do you think this says about the renewables market?
1. I noticed Northland (NPIFF) popped $1 after the deal was announced. After their recent dividend reset and complaints about inadequate access to capital, is a similar buyout an obvious endgame? 
2. Is this more evidence that the AES buyout offer is way too low? I'm planning to vote no (as if my share total moves the needle). I actually bought more shares at 14 recently, since I can handle the proposition of a >10% total return if the deal goes through even if a sweetened offer does not materialize.
AES management's explanation for accepting their $15 buyout offer did not sit well with me. Claiming that they would need to potentially cut the dividend (already with a very low payout ratio) in order to sustain growth either sounds like they had been overselling the financial soundness of their businesses and extent of debts OR they are determined to grow faster than their cash flows can support. And if it's the latter, then I don't see how as a shareholder I'm supposed to accept locking in a haircut on the share price AND losing out on future growth this acquisition is supposed to enable. I'm forced to ask the ugly question: is management getting different incentives that would make them recommend a raw deal for shareholders? Have the full terms been disclosed?
 
1:48
Finally, a different sort of question as I look at this market: what do you think of the state of private equity/alternative asset management since the recent market corrections sparked by Blue Owl and liquidity concerns? Seems timely to ask with buyouts of AES, Boralex, and others coming from private equity. Is it worth owning the private equity management shares that seem to keep upending my long-term investing plans by buyouts near the bottom? 
1. I'd recently been building a stake in Brookfield (BAM), since those common shares are fine in retirement accounts, unlike BEP and BIP MLP shares. 
2. In reading some analyst reports (always reading with grain of salt), the recurring caution is that growth of Brookfield, Blackstone, Blackrock, Apollo, etc is that they might not attract new investment at their historical rates. But they generally all carry pitifully little debt tied to their management shares--assets and associated debts are packed into funds they control.
Does this effectively limit the downside risk in management shares like BAM (and BX etc)? i.e. even if growth capital slows or dries up, the parent won't be caught unable to meet debt obligations, and the management fees for existing assets should be locked in?
 
Thanks,
Dan N.
 
 
A. Hi Dan. Great questions as always.

Contract/merchant electricity generation is fundamentally a business that does better when companies build scale. And ownership has been
consolidating rapidly for most of this decade in the US--with even some large players like Consolidated Edison and DukeEnergy selling out to larger players.
1:49
In general, the economics are that capital costs are lower, there's
greater clout when it comes to procurement and customer risk is more
dispersed and therefore less. Companies focused on renewable energy
benefit greatly from geographic diversification, since a weak wind
quarter in one region can be offset by better solar conditions in
another place. Brookfield Renewable is a great example of that--10
years ago, quarterly earnings would fluctuate wildly based on water
conditions at its hydro facilities. Now investment drives growth as
weather conditions generally equalize over what's now a global
portfolio.
The Trump Administration has made it more difficult to permit new wind
and solar on federal lands. And they've done what they could to slow
development on private lands as well--particularly with the rapid
phase out wind and solar tax credits. That's predictably increased the
value of existing sites, which are permitted, have interconnection to
the grid and can be uprated by increasing generation (repowering, new
turbines etc) and pairing with increasingly cheap battery storage. And
unlike the wind and solar itself, battery storage investment is
heavily incentivized.
1:50
I think there's a good possibility we'll see wind and solar tax credits make a comeback next year. Democrats appear heavy favorites now to take control of Congress. But there are also many Republicans
that want to see them restored. If that happens, I think stocks of renewable energy companies are going a lot higher very quickly. So from an acquirer's point of view, this is the time to strike on takeovers, especially since these generation companies are already
proving they can make plenty of money in a Trump Administration.
From the targets' point of view, it's true AES, Boralex, Clearway, Northland Power and others have a massive investment opportunity. They are preferred suppliers for Big Tech, which otherwise is going to rely
pretty much exclusively on a single fuel to run data centers--natural gas. And the contracts getting signed are sweetheart deals of 20 years or more with escalators.

There is a challenge raising sufficient capital to meet demand. That's partly because borrowing costs have remained higher for longer--and at this point show no sign of coming down in a meaningful way. And the
situation will be even tighter when wind and solar tax credits phase out, as these had been offsetting the rise in interest rates on all-in costs--though storage remaining tax advantaged is a big plus. That's
less of a challenge for the leader NextEra Energy because of its unmatched scale--and it's taking advantage. And that company's competitors are trying to get closer to its economics--M&A being the
fastest way.
1:52
Boralex has very ambitious growth plans and has paid a pretty low dividend because of its capital needs. I think the deal is being driven by its largest shareholder La Caisse, which will go from 15% to
30% ownership. The premium is decent for other shareholders and clearly a big step from what the consortium led by Blackrock is offering for AES. And if bodes well for, say, a future offer for Northland Power. The AES offer was in turn a better deal than Innergex
received last year from La Caisse. So the market is definitely turning up for these assets.

Regarding Northland, there would be a few more moving parts to an offer. The company is basically leveraged to two major offshore wind projects, one in Taiwan and the other in the Baltic Sea off the Polish
coast. Get these projects up and running and suddenly there will be a lot of free cash flow
1:53
--which would be attractive to any number of
potential suitors. Offsetting that is there's more political risk than was involved with Boralex or Innergex--or really even AES despite the fact it is invested in multiple countries. I think Northland at this point has every intention of remaining independent. But I do think it will probably get an offer at some point.

As for AES, my view as I've said is the offer is too low. I think there is a solid value proposition to buying it around 14--just from the dividends and the difference to the offer price of $15. But this company has parent level investment grade credit ratings for the first time in its history. It has a strong record of executing new projects. And as of Q4, it was attracting considerable new business from Big Tech. Obviously, the stock price is heavily discounted at 6-7X earnings, so there is a capital raising challenge.
1:54
I think the company will still be a big winner from tax credits, given its massive growth in energy storage deployment. But having Blackrock and Calfornia's
Public Employees Retirement System and the Qatar Investment Authority as owners and financiers has to look attractive. That said, I think management almost certainly has some strong incentive to do this deal
that doesn't meet the eye.

You ask an intriguing question about private capital and how solid it is going forward for funding deals. Qatar is obviously feeling some pain right now with Operation Epic Fury fallout. And the Gulf States are visibly retrenching now in response--which could conceivably scuttle the AES takeover if Blackrock didn't step up. I don't put Brookfield in the same category as it has a lot more levers to pull to
close on Boralex, including dropping down some ownership to Brookfield Renewable. But i think we may be seeing the beginning of the end of private capital's funding advantage over publicly traded companies generally.
1:55
You have a good point about how these private capital companies have structured themselves to have little parent level risk. That's a good argument against a wholesale collapse. But the selling point for
raising capital so cheaply has been that private capital has an inside edge. And I think the funds now suspending redemptions is a pretty good sign that advantage will go away for most, which probably lessens the appeal of buying the parent level entities now traded on major exchanges.
 
Q. I'm curious why you recommend selling half of KMI but not any of EPD and ET? It seems to me that those two pipeline companies' revenues are not based on the price of oil, but their stock prices act like they are. Thanks, Tom L.
 
1:56
A. Hi Tom

It's basically a matter of valuation. C-Corp midstreams like Kinder Morgan now sell for massive premiums to MLP midstreams like Energy Transfer and Enterprise Products Partners. Let's take the simple dividend yield.

Kinder yields about 3.5% currently with an annual growth rate of 1.7% and a distributable cash flow coverage ratio of 75%. Enterprise yields about 5.6% with 12-month growth of 2.8% and a DCF coverage ratio of 58%. And Energy Transfer yields 6.86%, is growing 3.1% and has coverage of 56.5%. All three have excess free cash flow after dividends and CAPEX. All three are anchored by a diversified mix of
long-term contracts with creditworthy counterparties. And investment at all three is heavily weighted toward the growth of natural gas usage in the US (generating electricity) as well as exports, including NGLs and supporting LNG.
1:57
Why the massive premium for C-Corps like Kinder? I think there are two reasons. First, many institutions can't buy MLPs for one reason or another, which takes out a large potential pool of buyers. But the more important reason is simply that many retail investors are afraid of K-1s.

I get that. And the complication factor is probably worthy of some discount in price. But remember that a little over a decade ago, investors were clamoring for more MLPs. And Wall Street was pressuring the remaining C-Corps to go MLP. These preferences can and do turn over time. But what's important now is MLPs offer tax advantaged yields 2 to 3 percentage points higher than C-Corps that are also growing faster and are better protected with cash flow.
1:58
That premium is a pretty high price to pay just to avoid filing a K-1--or better paying your accountant to do the work. The added return on any decent sized investment will cover the extra fees many times
over.

As for these three stocks, KMI is trading at a price we've long designated as a good point for taking profits. Enterprise is very close to such a level. Energy Transfer is still at a good entry point.
 
Q. Hi Roger:
 
Following along with the acquisition of AES, do shareholders get to vote on the proposed agreement of $15 a share? I'm surprised, with the increased need for electricity production with AI that a suitor hasn't come along with a better offer? Does the current management of AES have a vested interest in accepting this $15 offer as opposed to accepting a higher offer from another suitor, that could be less beneficial to management, but more beneficial to shareholders? I'm quite suspicious of management readily accepting a share price offer lower than the then current market price of AES
1:59
when the offer was made.
Thanks--Jack A.
 
A. Hi Jack

Yes. The acquisition of AES Corp by the private capital consortium of Blackrock, CALPERs and the Qatar Investment Authority will have to be approved by shareholders as well as regulators. My view as I've said is that this is a low ball offer. And management seems to agree, as it has basically gone dark since the announcement--no Q4 earnings call, though they did file the 10-K with the SEC/

What we've seen since is a flurry of correspondence to bondholders, with the company repeatedly extending the "Consent Solicitation" for bondholders--a needed step to completing this deal. As of March 27, just 39% of $400 mil of needed approvals had been received at the DPL unit, 33% at Ipalco and 49% at the parent.
2:00
I'm not sure what to make of that. But it seems as though there is some reluctance on the part of bondholders to approve a deal that is basically a leveraged buyout. That almost certainty extends to
shareholders, since the consensus expectation prior to the actual offer was something in the upper teens. And I think fallout from Operation Epic Fury has introduced a new element of uncertainty to this deal, since the Qatar Investment Authority is one of the
partners.

I do think AES shares have a solid value proposition at a price of 14 or so--if the deal succeeds or fails. So I intend to keep holding the stock.
 
Q. First, wanted to say thanks for the excellent EIO analysis today - it's easily the best dissection of SMA implications I've seen.
Here's the question: does the analysis become more true when concentration risk (the cap-weighted sector overweight nature of $SPX) hits statistically record highs? (That is, might one say "worse things happen under the 200d MA when the $SPX has been at record stock concentration"?)
 
Or, is this a case of one of those 'ultimately, not really' because the increased volatility of the downward sloping moving average lines is essentially highlighting dispersion from the overly concentrated $SPX? That is, are we actually seeing the resolution of the overweight/concentration risk problem? 
 
Seems like the answer would illuminate hedging strategies, downside expectations, and other trading moves.
 
Second, price action aside, I'm curious about your and Roger's thoughts (across all of your portfolios) regarding the US vs rest of world thesis in light of (what's looking like) a longer war/Hormuz closure vs. shorter. 
 
2:01
Many thanks - I'm deeply appreciative of the work you and Roger are doing, especially at times like this. Best—Mike C.
 
 
 
A. Hi Mike

I'll just answer the part of your question directed to me, regarding US versus the rest of the world.

The strategies I use are highly US-centric, meaning most companies recommended are based in the US. That includes the majority of utilities and REITs, of course. But i still see a lot of merit in owning selected non-US companies, most importantly because much of the growth opportunity in the next few years is outside the US. Receiving dividends paid in foreign currency then converted to USD is also a hedge against economic turmoil in the US, as well as the US dollar weakness we've seen since early 2025.
2:02
As far as fallout from Operation Epic Fury, that seems to change pretty much daily. And the big winners in the market once day have traded places with the losers the next over the past month. I think over-leverage is probably the biggest risk right now, both for corporations and individuals. There's a growing realization that borrowing costs are staying higher for longer. And that means companies are continuing to retrench across industries, which means rising risk to dividends. But for the most part, I'm still sticking
with high quality companies across borders as the antidote.
 
 
Q. Dear Folks, I live on the opposite side of the world. The time difference makes it difficult to attend these chats in person, so I send email queries a few days ahead. Unfortunately, my queries did not end up in the queue for the last two chats. I hope these questions will make it.
First, I would like your thinking on VET, which has been on a tear lately. I see that the latest EIA letter gives a buy-under price of $15 and a take-profit of $30. Presumably the recent meteoric rise in share price is connected with the company's European drilling program, altho a recent agreement with the German utility Uniper does sell VET's German production for 2 years. The contract probably does offer VET some upside to spot prices and the TTF futures curve, but I would suspect that it also caps that upside to a certain extent. Any thoughts on that? Is the present interest in VET going to fade significantly when the Mideast situation gets "resolved" ? -- or do you think that $12/$13 might be a new normal for the stock? And I mistaken to assume that VET's fairly recent "discovery" by the market is only a measure of its European production? Are wonderful things also happening with its Canadian production?
 
Second, some time ago, Elliot posted a chart illustrating that the prices of agricultural
2:03
commodities often tend to spike along with oil price spikes, although the timing is unpredictable. Currently, DBA appears to be in an uptrend of sorts. Do you have thoughts about this, or is it outside your bailiwick?
 
Thirdly, there was a time once when you were willing to entertain questions not directly connected to energy in these chats. Perhaps that no longer is the case. Nevertheless, I hope you might answer a question about ACN, which has gotten pounded along with many software-related and AI-integration stocks in the present fearful environment concerning AI disruption. If I remember correctly, Elliot did say something about ACN in regard a little while, although it may have been in reference to an advisory I do not subscribe to. (I only subscribe to three.). Anyway, I wonder if you might give me your opinion about ACN, which seemed to have a good earnings report recently. Its swoon reminds me of the deep drop that Major Integrated Oil Companies experienced several years ago on the fear of a huge oil
2:04
glut. Maybe apples to oranges. Still, any comments?
 
Many thanx, Jeffrey H
 
A. Hi Jeffrey

I'll just focus on the part of your question addressed to me, concerning Vermilion Energy. This stock has been very cheap for a very long time for a number of
reasons. I think clearly their natural gas position in Europe is again a big positive. There's a growing realization that gas is going to be critical to keeping the lights on for some years to come, even with
the EU's focus on renewable energy and (in the UK, France and Belgium) nuclear power. And while VET isn't a major producer, it certainly has some opportunity.
Canadian natural gas has historically flowed all to the US, which meant it competed with all of that cheap shale gas. But now the first LNG export facility on the Pacific coast is open and there are several other projects set for completion in the next few years--so Asia is now a real market for the first time. And transporting Canadian NGLs and LNG from there takes about half the time as shipping from the US
Gulf Coast. Canada also arguably has a political advantage over US exporting to those markets, And with Qatar supplies under a force majeure, there's every reason for buyers in Japan, Korea, China etc to
lock in contracts with Canadian producers.

As for results, VET issued Q4 numbers earlier this month and they were quite robust--even in a period where gas prices averaged significantly lower than they have been in Q1 2026. Debt is coming down and the company is accelerating its best production--including the Montney shale near Canada's Pacific Coast LNG export boom.
2:05
I don't think you can ever say there's a "new normal" for oil and gas producers. VET like other producers was depressed last year when oil and gas prices were low. And it's surged this year. But the company
appears to be in a good place for solid returns the next few years as the energy upcycle continues.
 
Q. Roger—thought you might like to know that Schwab cannot move money into the Vanguard fund that you recommend.
 
Tried to shift idle cash this week; the Tacoma, WA branch manager explained why their website declined to execute the transaction.
 
No big deal. I’ll keep using their SWVXX.
 
Thanks for all your continuing guidance month after month.—John A.
 
 
A. Hi John
 
I think the Schwab fund should do what you want it to. The only real requirements for a cash alternative is that you can count on the NAV staying at $1 and the ability to access funds when you need them--either as withdrawals or to buy stocks.
 
 
Q. For Roger,
 
I just posted in the dividends round table.
 
What do you know about BUI/RT?  It just popped up. It appears to be a right to purchase, but it has plummeted 31% on opening.  It has a date of 4/2/2026. Is it worth buying? What is going on with it? I'm unclear on how to value it. Apparently, it is 95% of some moving average, but why is it down now 35% when the underlying stock has only dropped 0.15 % today?
2:06
It seems somewhat time-sensitive, and none is on the platform.—Arthur H.
 
 
A. Hi Arthur

The Blackrock Power & Utilities (NYSE: BUI) closed end fund "rights” give you the right to buy BUI units at a discount of up to 5% of the market price of the fund. The discount in the buy price is reduced if the fund trades at a discount to net asset value. And it goes to zero if the discount of market price to NAV is 5% or greater
2:07
When BUI issued the rights, the fund was trading at a premium to NAV of close to 10%. The shares went to a discount to NAV when the rights were issued, greatly diminishing their value. My advice has been to
wait until closer to the expiry date to make a decision, to see if the discount went away. As of Friday's close, the discount was 3.6% plus, so the effective discount for exercising the warrants is just a little more than 1%. And depending on the market action April 1, it could
easily go to zero.

Bottom line, there's no arbitrage play here from exercising and then selling. The only reason to exercise the warrants would be to add to your position in BUI. The fund does trade below my highest entry point of 28. And it is very solid. But like any other holding, investors should not overload on it. So the decision of what to do should boil down to whether you're light on BUI and are looking for an opportunity
to add shares. If not, you can try to sell the rights or just let them expire.
Q. Hi, In case I can’t attend. a couple questions for the chat. i'll catchup with the transcript
 
- why such a large difference in price between BEP and BEPC. Same company. recommendation?
 
- comments on oil crisis and guidance...i imagine everyone asks.
Thanks--John C.
 
A. Hi John

The only difference between Brookfield Renewable's MLP shares traded BEP and the C-Corp shares traded BEPC is the K-1. They represent the same ownership and pay the same dividend. But BEP has a K-1 at tax time, while BEPC sends a 1099.
2:08
We're at a point where MLPs are as unpopular relative to C-Corps as C-Corps were to MLPs a decade or so ago. I think the discount will close over time, maybe faster than anyone expects. But in the meantime, you can get a much higher yield that's tax advantaged too
with BEP. And with any decent sized position, the additional post-tax income will pay for the additional accounting fee filing a K-1 many times over.
 
Q. Hi Roger:
Do you have any recommendations (to hold or sell) for those of us REIT Sheet subscribers who have bought NSA and which now apparently is merging now with Public Storage?—Barry J.
 
A. Hi Barry
I don't think we've seen the last takeover in the self-storage space. The sector has been burdened by oversupply in multiple markets the past few years. That's meant higher vacancy and slower rent growth. But there's been very little built in the past few years because of that and higher for longer borrowing costs. So we're heading toward a much tighter market the next few years.
 
With National Storage taken, CubeSmart (NYSE: CUBE) is next on the list of mid-sized self storage REITs ripe for the picking. I highlight it in the REIT Sheet this month as one of my "Five Best Fresh Money Buys."
 
Q.  just looked at https://conradsutilityinvestor.com/ for the first time in a while.
 
Where are the links to your various portfolios?
2:09
Bur.
 
A. Hi Bur

The files for the portfolios are now embedded in the issues, rather than posted elsewhere on the site. There is a csv option to download as well as the pdf.

Please let me know if you have trouble finding it.
 
Q. Hi Roger:
When did LYB reduce their dividend? What explanation did they offer? I suppose no surprise to you?—Barry J.
 
A. Hi Barry
 
Lyondell had hinted at a dividend cut previously as the consequence of market conditions remaining difficult longer than they had expected. As it turned out, Operation Epic Fury fallout has greatly benefitted them by boosting the economics of natural gas feedstocks versus crude oil. 
 
The roughly 50% dividend cut was effective with the March 9 payout. I'm not certain if management will move to raise it again given the changed circumstances. The stock has certainly been off to the races, though it looks pretty vulnerable at this price if peace somehow breaks out in the Gulf. I would say it's a good time to step back if you're still holding it. The pre-War supply challenges are still there. And this stock could easily come back to the 50s if what's happening now leads to a market decline and/or economic downturn. There are a lot of stocks with better yields also.
 
Susan P.
2:22
Public resistance to data centers due to the perceived impact on electricity prices, along with broken contracts that may result (for other reasons as well), seems to get relatively less focus. How do you view these concerns when recommending mid-streamers with contracts, along with utilities and other energy and power generation names? Management's guidance may or may not consider these contracts as "secure"?? Are there names that are especially vulnerable and/or ones that are more protected? Thanks for your thoughts.
AvatarRoger Conrad
2:22
Hi Susan. First off, we know that every investment boom eventually ends with a bust--in large part due to overbuilding/too much supply. I don't think anyone can forecast accurately what percentage of demand from current data center connection queues will get filled. There was certainly no sign anything was slowing in Q4 results and guidance updates. We'll see what it looks like in Q1, starting with NextEra around April 23. But orders still seem to be flowing from Big Tech--which despite weakness in several stocks is still quite financially powerful.

But if the boom ended today, I think the vast majority of regulated utilities would be on very firm ground. Dominion Energy provided quite a bit of color on its 48.5 GW queue in the Q4 call and related materials. And takeaway #1 is they're literally getting paid by the data center owners under contract for everything they're doing to meet demand--from transmission to generation. If data center demand doesn't materialize, it will have the assets in rate base.
AvatarRoger Conrad
2:24
Continuing on Susan's AI question, I think the primary protection for independent power producers and midstream operators is contracts with strong counterparties. I don't think all contracts are equal quality. And to the extend midstream companies aren't just selling gas to utilities under contract, they're taking on more risk.
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