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AvatarRoger Conrad
4:13
My view is Edison's current price reflect the risk that there's no utility liability reform in California and that the state provides the funds to comply with the law--which would mean a maximum $4 bil liability for Edison if negligence is proven--which is a much higher standard. I think it's a worthy bet at the current price. But there are other utilities I like as well. So balance and diversification are always best, rather than heavy exposure to a single company's situation.
John A
4:16
If I expect the US dollar to eventually depreciate under its heavy debt burden, shouldn't CDPYF eventually improve?
AvatarRoger Conrad
4:16
Hi John. I think one of the top attractions of Canadian stocks right now is they do pay dividends in and are priced in a currency other than the US dollar. And the currency has historically been linked to rising commodity prices and scarcity, which should be the case for several years.

I also think Canadian Apartment is a very well managed REIT with a very safe dividend. And it's quite cheap right now in advance of Q3 earnings on Nov 4.
JT
4:19
Hi Elliott. Energy stocks have had a good run.  Besides the refiners (ex. VLO, PBF) are there any other energy groups, or names you cover, in which you feel that it is prudent to take some money off the table?
AvatarElliott Gue
4:19
The refiners are the most stretched fundamentally at this time. Within the current model portfolio most of the oil-levered upstream names are still pretty solid values and they're not pricing in crude at anything close to the current ~$100+/bbl long term. The gas-levered names (EXE/EQT) are actually cheap to dirt cheap in my view and so are the services names (SLB in particular). Despite the large headline gains I don't see a lot of "fluff" in the sector as the starting point was so low (valuations so depressed in late 2025). We are thinking/talking about putting together a "Blacklist" of names to avoid (outside our portfolio recommendations) later on this year if you think that would be useful, let us know.
kurt e
4:23
For Natural Gas, oil, and MLPs securities, what companies are trading at a reasonable price and are great takeover candidate candidates for the next 12 months?
AvatarRoger Conrad
4:23
I think the "buy up to prices" we list for a couple hundred energy stocks in Energy and Income Advisor have been a pretty good guide the past few years to buying high quality companies at good entry points. And I would strongly advise continuing to follow them--meaning if a particular stock sells for more, it's best to wait to buy, or else look to one of the stocks that's still selling for less than its "buy up to" price.

If you're not currently a subscriber to EIA, check it out by calling Sherry anytime, M-F, 9-5 ET at 877-302-0749. We actually highlight a number of top buys in the two-part issue we posted this week, including several companies highlighted in this chat such as Hess Midstream--which as I answered in a previous question I do consider to be an attractive potential takeover target with Chevron no longer to be a controlling shareholder.

Ultimately, pretty much every company in this business is a potential takeover target. And there are three ways to play.
Victor
4:25
Elliott, If I recall correctly one name that you were thinking about adding to the model portfolio was FANG. Are you still considering it? You rate this one as aggressive, can you expand on that?
AvatarElliott Gue
4:25
IT's definitely a name we like. The main reason we haven't added it is that PR/OVV give us Permian exposure and we like them just a bit more. The truth is that any high quality E&P has upside to an $80/bbl pricing deck, because most of these names are still priced for a return to average 2025 WTI pricing, which we regard as very, very naiive. So, we haev generally focused on names with stock-specific catalysts or valuation disconnects. We just see (slightly) more significant near-term tailwinds at OVV/PR than FANG. Hard to argue with the long-term value there and they are extraordinarily well managed in my view. The aggressive rating is more about the fact that all E&Ps are going to have more commodity exposure than, for example, midstreams or supermajors like XOM. Within the E&Ps specifically, FANG is one of the more defensive names.
AvatarRoger Conrad
4:25
The three ways to bet on takeovers are (1) buy companies you think will receive an offer--they should all be companies you'd want to own if there were no deal to avoid a take under, (2) buy targets that already have offers and hold on to collect when the deals close, (3) buy stocks of acquirers that are adding to earnings by making deals now, for example EQT buying Range Resources, ONEOK's recent deals with help from private capital firm Apollo, etc. Look for a takeover article in an upcoming EIA.
Alex M.
4:32
Hi Roger.  What are your thoughts on some of the recently issued utility baby bonds now that they offer appealing yields in the 7-8% range (e.g., XELLL, SRJN, DTW, etc.)?  Thanks.
AvatarRoger Conrad
4:32
Hi Alex. My view is we're almost always better off buying the stocks of these companies--yields are generous and they're being increased faster than the rate of inflation. And with utility bonds, I favor sub-investment grade companies that are likely to get upgrades in the next 12 to 18 months--that will close their yield gap with investment grade debt giving us capital gains. i also prefer intermediate-term maturities to longer-term or perpetuities, since there's less risk to rising interest rates.

Regarding the baby bonds, I think the most important thing is the underlying company is solid--and Xcel Energy. Spire et al certainly are. I would expect them to be as volatile as the rest of the bond market in terms of principal. And inflation will erode the purchasing power of the interest. But so long as the companies paying the interest are solid on the inside, you'll get the interest.

This is a good subject for a future CUI--possibly December though as next month will be post-election regulation and Q3.
Jon B
4:33
Hi. How do you think BKR is positioned for the next several years? Seems from their recent earnings release (which wasn't well received) that maybe they were up against some inflationary pressures. Also, maybe there is concern about MIddle East business in near term? What are the main catalysts that could propel the stock?
AvatarElliott Gue
4:33
Thanks for the question. BKR has outperformed its two main comparable -- HAL and SLB -- by a significant margin over the past few years. So, a good bit of the action you see in the stock is likely just rotation our of BKR and into names like SLB/HAL that have lagged a bit rather than any fundamental shift in the prospects for the business. I'd say that BKR has been above our buy under price for some time so it's effectively a "hold" for us now, while SLB remains below our buy under price. I'd also say that SLB has more upside leverage to a turn in the international (Non-US land/Canada) spending cycle that either HAL or BKR, which is why we prefer it here as a new buy. For BKR probably the two main drivers are 1. LNG -- Middle East  De-escalation would support the stock as they sell a lot of equipment and provide services for LNG export terminals in Qatar. 2. Growth in their data center business, enhanced via their acquisition of a cryogenic equipment company a few quarters ago. Both drivers remain in place
AvatarElliott Gue
4:33
just maybe more short-to-intermediate term catalysts for SLB.
Dave
4:37
Hi Roger -- I have a question regarding the REIT Pebblebrook Hotel Trust (PEB).  The share price has doubled in the past year to over $21 now.  Would you be able to say (1) what may be driving the increase and (2) would you expect this run up in price to continue?  Thank you!
AvatarRoger Conrad
4:37
Hi Dave. All of the resort/hospitality REITs have been strong this year--reflecting a big recovery for the business since the pandemic year triggered multiple dividend cuts and even bankruptcies. The sector has consolidated, high graded assets, reduced debt and cut costs. And they're posting strong results because of that.

As I noted in the REIT Sheet that posted Monday, I would say hospitality as a sector would be vulnerable to a recession--or even continuing inflation that erodes consumer purchasing power. That's something I'll be on the lookout for with APLE on Nov 5 and RHP Nov 2. And though I don't currently track PEB, it is a key concern when that REIT reports Oct 29.
AvatarRoger Conrad
4:37
I do consider it to be profit taking time on RHP.
Mike C
4:46
Good afternoon gentlemen, and as always, thanks for hosting these. Curious about your thoughts on AGL, AQN, and FLNC (tax loss candidate?), as well as what you think the catalyst will be for gold to resume its outperformance. Many thanks! Best, Mike
AvatarRoger Conrad
4:46
Hi Mike. Whether AGL, Algonquin and Fluence are good tax loss candidates for this year depends on (1) what sort of gains you have to balance them against and (2) how long you've held them and how deep your losses are. Fluence is the only one with a really big loss year-to-date. But AQN has been a laggard the last few years.

I believe all three will eventually reach a price at least 3X where they trade now. I don't think that will happen by the end of 2026. But AQN is basically a pure play utility that will return to dividend growth the next few years if it's not taken over first. AGL is still Australia's dominant electricity company. And though wholesale prices affect the dividend and regulation is erratic, the country is moving to tighter supply. Fluence faces the hardest road to recovery. But its challenge is basically meeting robust demand. And while we could see another guidance cut next month, debt essentially convertible senior notes that are just 18% of stockholders equity.
AvatarRoger Conrad
4:48
I do think we want to stick with our gold investments. I favor stocks of mining companies like Newmont, which just reported another huge quarter for earnings with $1.9 bil of free cash flow-which it's used to cut costs, debt and buy back stock.
4:50
As far as upside catalysts, gold is something people buy when they're concerned about chaos. I think it's consolidated here around $4K. But I also don't think the gold stocks like NEM are reflecting that price--rather something more like $3K--which is why I favor the stocks.
Victor
4:58
Hello Roger, I've been watching VST and it's been moving sideways for most of this year. Actually, it's trading in a range between $140 and $165. Some analysts from Morningstar estimate that VST's fair value should be lower to where it is now. What is your opinion on this one in the short term, like 6 to 9 months out?
AvatarRoger Conrad
4:58
Hi Victor. i think the year to date declines in Vistra, Constellation Energy and especially NRG reflect concern data center demand for electricity won't materialize--which doesn't gybe with the fact that investors have apparently been willing to keep bidding up AI-focused Big Tech stocks.

I did advise taking profits of all three last year--we actually sold all our CEG, though I kept VST in the Aggressive Holdings. But i think VST is a solid value where it is now at basically one-third lower than its all-time high reached last year.

I have no idea why Morningstar values the company at a lower price. But I can say analysts' 12-month price targets for stocks get my vote for most useless market forecasting indicator. They're invariably raised when the stock is rising, and cut when its dropping. And there's a fear of standing out--so a cut or raise at one firm will almost always trigger one at another. Vistra currently has 18 buy recommendations and 4 strong buys, according to information source Koyfin.
AvatarRoger Conrad
5:00
That's against no holds, no sells and one strong sell. The high price target is officially still $305 and the low is $106 with the average at $207. That's pretty wild variation for a stock with such a consensus of buys--I don't think it's worth out time trying to divine why. I think you can learn something from reading the reasoning behind the analysis. But the easy one size fits all number is pretty useless in my view.
5:02
All this to say, I think Vistra will go quite a bit higher in the next 3 to 5 years. Near-term, it's going to be fighting investor concerns about electricity demand from AI not materializing for political reasons, no matter what companies are actually reporting. And I think we should be prepared for VST, CEG and NRG to be range bound--though in a pretty wide range.
Victor
5:08
Hi Roger, Could you please comment on XIFR? This one has been slowly moving up, but more recently it's turning back down. Thanks.
AvatarRoger Conrad
5:08
I don't think we should read too much into XPLR Infrastructure's share price volatility, which this year has been mostly between $10 and $12 per share--though in advance of earnings Nov 3 and with utilities (it's not one) selling off the price has gone under $10 at this point.

The key is the long-term financial recovery plan put into place almost two years ago. And we'll get a progress report next week--which I will highlight in the November CUI. But from all indications, we're going to see another solid quarter of building liquidity to ultimately eliminate the remaining CEPFs--convertible equity preferred financing--that has been a threat to have assets called away by private capital investors. The current plan does not rely on outside capital to succeed but free cash flow--which is now entirely devoted to that purpose since the dividend was suspended. I'll be interested in the update of the company's joint investment plan in paired storage with parent NextEra Energy. But I intend to stick.
Phil
5:16
I currently own both BEPC and BEP which are planning to merge. How will this be managed and how will my holding in the merged stock be determined? They are also planning to do an IPO for their interest in Westinghouse. How will this affect current stock owners? Many thanks for your very helpful advice over the years.
AvatarRoger Conrad
5:16
Hi Phil. Basically, this is a one-for-one--each share of BEPC and unit of BEP will be swapped for one share of a new C-Corp. Brookfield has said there will be no immediate tax consequences, including for holders of BEP.

The company has mailed out materials to investors. The deadline to vote has been extended to Nov 25, in advance of a shareholder meeting Nov 30. And assuming approval, the consolidation will occur shortly after.

I expect to hear more about the potential Westinghouse IPO when Brookfield Renewable reports Q3 results on Nov 6. But the company and partner Cameco are set to remain controlling shareholders after the IPO, with the sale likely to be 10-20% of Westinghouse. The purpose is to get cash but also to establish a market value for their holdings. And a successful deal should be very positive for BEP/BEPC shareholders.
Shelllco
5:23
Hi Roger, I joined the chat late, so I don't know whether you addressed these 2 companies already. Do you have an opinion on EPRT and HST.
AvatarRoger Conrad
5:23
I have not yet. Essential was one of the handful of REITs that posted Q3 results before I posted the October REIT Sheet. And I have highlights in the REIT Rater where I track the company as a buy at 33 or less.

The REIT raised its 2026 guidance for the third time this year, following boosts in investment guidance--which is the primary driver for FFO growth. Management also issued 2027 guidance that also appears very conservative and therefore beatable.

Host Hotels and Resorts is not one I currently track in REIT Sheet. But I do cover several hospitality REITs and I believe the group is fully valued after some big gains this year--HST is up more than 40% year to date. Earnings are Nov 5 and I expect solid numbers. But I will be wary of any sign consumers are cutting back on hotel stays.
Kevin
5:30
Hi Roger, What do you think about some of the better rated utility preferred stocks (baby bonds) for income at this point? It seems most are yielding 6%+ and trading at a significant discount to their call price. Thanks.
AvatarRoger Conrad
5:30
I answered a question on utility baby bonds a little earlier in the chat. As I said, I definitely prefer utility stocks. Yields are a couple points below most of these baby bond yields. But if you choose strong companies, the common stock dividends will rise over time, offsetting inflation--which looks like it's going to stay higher for longer.

Anyone who does buy the baby bonds should first and foremost stick with issuing companies that are strong on the inside. And be ready for prices to remain volatile and quite possibly decline if inflation and interest rates stay elevated.

i will be taking a look a big yield opportunities in the December CUI--including baby bonds and the remaining mandatory convertible preferreds, which pay big yields and are valued in line with stock prices.
Sal P
5:38
Evening Gentleman   Speaking of gold i own nova gold for many years ,i know we dont cover it . But it is one of the largest gold deposit in the states . Just recently  they purchased the remaining 40 percent of shares owned by paulson advisers.which now gives them full control . Most pundint believe its worth twelve dollars , Its at six dollars now and I had it from two . Was wondering what is your thoughts . Thanks
AvatarRoger Conrad
5:38
Hi Sal. I have Newmont Corp as a recommendation for income focused investors. But i think gold stocks are a pretty decent hedge right now against inflation remaining higher for longer than people expect.

I would say Nova Gold is considerably more speculative than Newmont--far smaller, no earnings yet with negative cash flow and the only real asset an ownership interest in a still developing project. If the Donlin Gold Project does start producing and gold prices stay strong, the stock could be 2-3X where it is now in the next 12 months. On the other hand, if the project is less than what management has been hyping, the stock could easily halve even if gold goes to $5K or higher. I'm not saying that will happen. But in 40+ years in this business, I've seen a lot worse. Just be aware of the risk. You're not just betting on gold prices with NG.
Jack
5:51
The fall in the price of BEP is quite disconcerting....  What do you attribute this to?  Is it solely the increase in interest rates , or is there more involved?
AvatarRoger Conrad
5:51
First off, the decline this year has been in Brookfield Renewable's C-Corp shares. The partnership units traded at BEP actually have a 11.2% year to date total return--which is about 9 percentage points better than close peer Clearway Energy, 10 points better than the SPDR Utilities ETF (XLU) and 50 points better than rival power producer NRG.

The C-Corp shares are down about -20% year to date. That's because their once-massive premium to BEP is now only about 63 cents--the result of Brookfield's plan to consolidate BEP and BEPC into a single C-Corp share.

Ultmately, I expect the simplification plan to result in a much higher price for BEP/BEPC. And as I said earlier in the chat, I expect a solid result on Nov 4 for Q3 results and guidance. BTW, I just now saw a report that Brookfield shareholders have approved the consolidation. If true, that will be confirmed with earnings.
AvatarRoger Conrad
5:52
It's possible BEP/BEPC shares are being held back to some extent by investor worries about higher for longer interest rates on the company's ability to grow. I expect management to show that's not currently a major factor by staying on track with growth and investment.
Shelllco
5:58
Hi Roger,  What are your thoughts on NBR?
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