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  • Roger S. Conrad

Roger S. Conrad needs no introduction to individual and professional investors, many of whom have profited from his decades of experience uncovering the best dividend-paying stocks for accumulating sustainable wealth.

Roger built his reputation with Utility Forecaster, a publication he founded more than 20 years ago that The Hulbert Financial Digest routinely ranked as one of the best investment newsletters. He’s also a sought-after expert on master limited partnerships (MLP) and former Canadian royalty trusts.

In April 2013, Roger reunited with his long-time friend and colleague, Elliott Gue, becoming co-editor of Energy & Income Advisor, a semimonthly online newsletter that’s dedicated to uncovering the most profitable opportunities in the energy sector.

Although the masthead may have changed, readers can count on Roger to deliver the same high-quality analysis and rational assessment of the best dividend-paying utilities, MLPs and dividend-paying Canadian energy names.

Articles

The Skinny On Drop-Down MLPs

The so-called drop-down transaction—where a sponsor sells an asset to its associated master limited partnership (MLP)—has a long history (dating back to 1983) as a strategy for energy companies to monetize their midstream (pipelines and processing) assets.

Not only does this approach unlock the value of midstream assets that a refiner or upstream operator may not have run for a profit, but the parent also retains control of this critical infrastructure and garners a growing stream of cash flow via their incentive distribution rights.

The number and total value of drop-down transactions announced surged in 2010 and continued to climb in subsequent years, peaking in 2015. Deal flow slowed considerably in 2016 but remained elevated relative to historical norms.

Although this overweight position worked for a time and these stocks held their value reasonably well during the down-cycle, MLPs that rely heavily on drop-down strategies have underperformed since the start of 2016.

We explore the factors driving this underperformance, explain why all drop-down stories aren’t created equal and make the case for some of our favorite names in the current environment.

What to Buy Now and an International Update

International energy stocks have done extraordinarily well this year, juiced by a recovery in oil prices and stabilization in the value of the Canadian and Australian dollars—currencies that had come under significant pressure in recent years.

On a year-to-date basis, the 13 holdings in our International Portfolio’s conservative sleeve have gained an average of 20.5 percent. The seven stocks in our aggressive sleeve, which entail more exposure to commodity prices and absorbed a harder hit during the down-cycle, have generated an average total return of 55.9 percent.

As part of our background work for this issue, we’ve updated our comments and ratings for the more than 90 names in our International Coverage Universe. We discuss our key takeaways from this exhaustive (and frequently exhausting process) and highlight our best investment ideas in this universe.

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  • Live Chat with

    Elliott and Roger on Nov. 30, 2017

  • Portfolios & Ratings

    • Model Portfolios

      Balanced portfolios of energy stocks for aggressive and conservative investors.

    • Coverage Universe

      Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.

    • MLP Ratings

      Our assessment of every energy-related master limited partnership.

    • International Coverage Universe

      Roger Conrad’s coverage of more than 70 dividend-paying energy names.

    Experts

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Peter Staas

      Managing Editor: Capitalist Times and Energy & Income Advisor