JotCast | September 2023 Capitalist Times Live Chat

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September 2023 Capitalist Times Live Chat

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ron

6:52

Would appreciate your thoughts on AES, and if you would buy it here.

Roger Conrad

6:52

Hi Ron, Like I answered above, I think AES is being priced as though it were the same company of 20 years--and didn't now have an investment grade credit rating and a leading position in renewable energy and energy storage deployment in the US and globally. There is developing world exposure. But there's also ring fencing financially and numerous ways to control operating risk. I look for management to again affirm guidance early next month and the company to weather even a hard landing for the economy. I like it here as a buy below my Dream Buy price for those who don't already own it.

Victor

6:52

Hello Guys and thank you for this chat. They are very good and very informative. *According to Bloomberg, Harlod Hamm said oil is headed to $150 unless the US government encourages exploration. He also said that he has no intention of boosting production as prices go up.

Elliott Gue

6:52

Thanks for the question. I answered this one above -- for some reason it seems to have double-posted.

John C

6:56

Why is AGR taking such a beating?

Roger Conrad

6:56

Hi John. For one thing, every utility stock is right now. Specific to Avangrid Inc, there's concern about being able to close the acquisition of PNM Resources in a timely manner, and that further delays will cause the company to cut into near-term growth guidance. But at the end of the day, this company is the US unit of Iberdrola SA (Spain: IBE, OTC: IBDRY), which owns 81.61%. And the company is on the verge of opening the 800 megawatt capacity Vineyard offshore wind facility, which will provide a big lift to cash flow as will finishing work on the transmission line from Canada. Stock looks very cheap at 12X expected next 12 months earnings.

Frank

6:57

I got caught this year having to file an 990-T, primarily by MPLX. Can you suggest an substitute(1099payer) for your High Yield portfolio?

Roger Conrad

6:57

If you're looking for a C-Corp, Hess Midstream (NYSE: HESM) is an option. So is Enbridge Inc (NYSE: ENB), TC Energy (NYSE: TRP) and ONEOK Inc (NYSE: OKE).

Guest

7:00

Hi Guys. Just started positions in NEE, DUK and BEPC. Your thoughts please. Just seemed they were getting too cheap to ignore. Especially NEE & BEPC.

Roger Conrad

7:00

We like and recommend purchasing all three of them. Dividends are safe and growing. There's a clear path to growth by deploying renewable energy especially. And they're all very cheap. BEP/BEPC is trying to complete a trio of acquisitions with the help of its parent Brookfield Asset Management and will likely trade at a discount until they close--or the company walks away as it might do with Australia's Origin Energy. But it's large enough now for challenges in one region to be more than offset by strength elsewhere. Duke and NextEra Energy have strong regulated utilities so are probably a bit more conservative.

Dave

7:00

Just tried to log in to read Income Insights, no movement on the web site page. No need to respond, just thought you might check it out. Dave

Roger Conrad

7:00

Thanks for pointing that out. I'll alert Sherry.

Roman A

7:02

I don't remember Sunoco being mentioned in these chats. What do you think of them? Sunoco LP (SUN)

Roger Conrad

7:02

Hi Roman. I just answered a question on Suncor. I like it and believe it will head a lot higher during this energy up cycle. The oil sands focus makes the stock something of a pariah at this point. But cash flows are getting strong and the completion of the Trans Mountain pipeline really will open up new Asian markets to its output. It's a buy at 35 or lower.

ben

7:11

If you had to buy one utility tomorrow, what would you buy and why?

Roger Conrad

7:11

Ha! You should read my Substack column this week--in fact all of our members are welcome to sign up for "Dividends with Roger Conrad" at substack.com. I do them weekly.

In the current column, I state my patented answer to the question, which is "balance and diversify.' But for everyone who's stuck with us throughout the chat, I do have a utility stock for you--that's NextEra Energy (NYSE: NEE), which is down a couple bucks today to its lowest level since the middle of the pandemic year. That's despite consistently beating guidance and finding new ways to grow. In fact, they just now affirmed long-term projections after announcing the sale of Florida City Gas for $923 mil in cash to Chesapeake Utilities for a solid gain and low cost financing for renewable energy growth. Anyone who doesn't own the stock has a golden opportunity to buy in now.

richard

7:16

I see the dividend on D is pretty good---do you see it being fairly safe please ??

Roger Conrad

7:16

Hi Richard. Dominion is in the final stages of completing its strategic review, after which it's promised to present full guidance for earnings and dividends, as well as debt reduction and future operations. With the Cove Point LNG facility sold and a deal in place to sell he natural gas distribution utilities, it's clear the future of the company is electric.--though it may still sell the Millstone nuclear plant and/or the contract renewable energy business to become a pure regulated electric utility. Throughout the review process, management has said it will maintain the current dividend. But while that's certainly possible or even likely given the likely future business mix, I no longer rate it as 100% certain. What I can say is Dominion trading in the low 40s is pricing in a lot of uncertainty that's likely to vanish in the next couple months. And my view is with a new direction, the stock is going to head a lot higher when utilities return to favor as a sector. I rate D a buy at 65 or lower.

Karl E.

7:20

Recently I saw some discussions to to Chord Energy (CHRD) including Barron's. I looked and haven't been able to find any info in your services so you may not follow CHRD but if you have an opinion could you share it. Thanks

Roger Conrad

7:20

Chord Energy isn't one we currently track, though it looks like one we could pick up. The dividend is clearly pegged to commodity prices, which makes it highly variable and should be a very good thing longer-term. The stock also has good institutional support with 11 buys and 2 holds with no sells, though insiders have been heavy sellers when the stock has risen. We'll look at it in more detail and consider adding to coverage in EIA. Thanks for the question.

Mari

7:23

Hi Roger and Elliot What role do you think hydrogen will play in the global push for clean energy? Air Products teamed with AES recently to build hydrogen plants in N. Texas. Positive? What about APD - do you like the stock? Thanks

Roger Conrad

7:23

Hi Mari. I think hydrogen has a ways to go before its economic for mass use, particularly "green" hydrogen produced from electrolysis. I like the AES/ Air Products venture because it doesn't pose a lot of risk for either company but it could be a big winner. And AES has a history of investing in profitable new tech, such as the founding of battery storage company Fluence Energy (NSDQ: FLNC). Bottom line--another reason to like very cheap AES. But hydrogen in our view is right now very much a show me story.

Roger Conrad

7:27

Well that looks like everything for today! Thanks again for your questions today. If for some reason we didn't fully address your query, please write us at service@capitalisttimes.com and we'll get back to you as soon as we can.

We will send you a link to the complete Q&A transcript tomorrow morning. And it will also be posted on our websites.

7:28

Thanks again for participating today. We really appreciate your business and look forward to chatting with you next month.

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