THIS MONTH’S ISSUE
Energy CAPEX: Accelerating but Fully Funded and Ever-Conservative
Will there be a new natural gas pipeline for New York and New England? The region could arguably use one after oil and LNG have once again provided a distressingly high portion of the region’s winter energy—and with cheap Appalachian gas so nearby. But it’s far more likely US oil and gas companies will continue to focus their real long-term spending projects on regions more friendly to fossil fuels. And in the US, there’s no place for energy investment like Texas and the Gulf Coast, where Kinder Morgan Inc (NYSE: KMI) just announced a major pipeline and supply deal with utility Entergy Corp (NYSE: ETR). After 20 years of flat to no growth, US electric utilities are seeing their biggest demand increases for electricity since the 1960s. And as management teams are again affirming in Q4 earnings calls, the cheapest and fastest way to meet it is with a combination of solar, battery storage and natural gas. Entergy’s main interest in Kinder’s gas is to supply reliable power to rapidly reshoring manufacturing and heavy industry in the Port Arthur corridor. And the need to get more Permian Basin gas to that market is also behind Energy Transfer LP’s (NYSE: ET)...
Live Chat
with Elliott Gue and Roger ConradOn 02/27/2025
Will Variable Payouts Rise or Fall in 2025?
Endangered Dividends List companies are vulnerable for one or more of the following reasons: Cash flow coverage of distributions is inadequate. Elevated debt levels with imminent refinancing needs. Revenue pressure triggered by weakness for at least one key asset. Inability to access the equity market on favorable terms to fund capital spending, forcing management to utilize more internally generated cash flow. Exposure to volatility in commodity margins from either rising or falling prices of raw materials. Aggressive general partners anxious to buy in limited partners’ cash flows at discounted prices. Regulatory reversals. Expiring contracts with little hope for renewals at...
More Strong Results from EIA Recommendations
The season for Q4 results and guidance updates continues to stretch on. As of the last issue of EIA, seven portfolio holdings had reported in: Baker Hughes (NYSE: BKR), ExxonMobil (NYSE: XOM), Hess Corp (NYSE: HES), Hess Midstream (NYSE: HESM), Kinder Morgan Inc (NYSE: KMI), SLB (NYSE: SLB) and Valero Energy (NYSE: VLO). Since then, most of their stocks have moved higher, riding a wave of upgrades by Wall Street research houses. And it’s despite little movement in crude oil prices, though natural gas has generally remained strong. Neither does there seem to have been much reaction to China’s move...
Top Takeaways from Energy Results So Far
End year corporate filings are far more complex and extensive than quarterly updates. So it should be no real surprise how long Q4 earnings reporting and guidance update season is stretching out this year. For portfolio purposes, we won’t have all the results until March 5. That’s when TC Energy (TSX: TRP, NYSE: TRP) spinoff South Bow (NYSE: SOBO) will release its numbers, with the company’s first ever guidance call as an independent company to follow the next morning. And other energy companies in the coverage universe are likely to report even later. That said, we’ve already identified several key...
Meet Our Editors
Elliott H. Gue
Founder and Chief Analyst
Since earning his bachelor’s and master’s degrees from the University of London, Elliott has dedicated himself to learning the ins and outs of this dynamic sector, scouring trade magazines, attending industry conferences, touring facilities and meeting with management teams.
Roger S. Conrad
Founder and Chief Analyst
Roger S. Conrad has successfully advised income investors since the 1980s, with a nationally acclaimed sector specialty in utilities, telecommunications and energy. He’s a managing partner of Capitalist Times author of Power Hungry, independent director of NYSE-listed Miller Howard High Income Equity Fund and contributing editor to Forbes.com.
