THIS MONTH’S ISSUE
Focus on the Micro: Our Recommended Stocks Outlook
Editors’ Note: Welcome to part one of your Energy and Income Advisor issue for this month. Part two will come your way early next week. Thanks for reading and your trust.—E.G., R.C. The producer-heavy S&P 500 Energy Index is now underwater by about -7 percent year to date, including dividends paid. That compares to a positive total return of roughly 8 percent so far for the technology stock-weighted S&P 500. The performance gap with the Oil Services Sector Index is even wider, with the drillers and service companies in the red by about -10 percent. Only the midstream focused Alerian MLP Index is in the black so far at around 7.7 percent, though the vast majority of that return is from dividend distributions. There are several fairly obvious reasons for energy stocks’ general underperformance this year. First, prices for energy commodities across the board are weaker than a year ago. Brent crude oil held over $100 a barrel and sometimes well above from March through August last year. But so far in 2023, the benchmark price has hovered around $80. In North America, WTI Cushing is currently in the low 70s after trading over $120 last ...
Live Chat
with Elliott Gue and Roger ConradOn 05/30/2023
Coming Soon
Feature Article will come your way early next week.
Endangered Dividends List
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 ...
Earnings Recap: Here’s What You Need to Know
In the previous issue, we highlighted Q1 results and guidance for two early reporters: Global services firm Baker Hughes Co (NYSE: BKR) and diversified North American midstream company Kinder Morgan Inc (NYSE: KMI). Here’s how the rest of the Model Portfolio and High Yield Energy List companies fared and our updated advice for each: • Black Stone Minerals LP (NYSE: BSM)—Buy<14 The natural gas-weighted mineral and royalty production trust posted Q1 distributable cash flow of 50 cents per share. That was -17 percent lower than in Q4 but up more than 13 percent from a year earlier. Dividend coverage was ...
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.
