Think Diversification and Growth

05/30/2014 9:30 am EST


Roger Conrad, of Capitalist Times, talks about utilities, MLPs, and global currencies and offers several plays for investors to take advantage of right now.

SPEAKER:  Hi, I’m here today with Roger Conrad from the Capitalist Times and we’re going to talk a little bit about how high-yielding stocks.  What kind of stocks of high-yielding stocks do you think people should consider to invest in?

ROGER CONRAD:  Well, I think what you need to do if you’re building a portfolio of high-yielding stocks, first of all is think diversification and also think that you don’t have income without growth for very long so what that argues for is a real diversity, a mix of things from a lot of different industries that are basically backed by good companies so a good portfolio I think right now should include utilities, MLPs, a lot of energy, but also maybe some foreign currency stocks and a lot of people don’t realize but if you buy a company based in Australia or Canada, your dividends are going to be paid in that currency and both of those currencies, Canadian dollar, Australian dollar…

SPEAKER:  Are we talking ADRs or trading on a different…

ROGER CONRAD:  It really doesn’t matter because you’re still valued in that currency and you’re still getting paid dividends in that currency.  If you buy an ADR, of course the issuing bank is going to translate that into US dollars but the actual US dollar value of that dividend will vary with the currency so let’s say we get more inflation in this country.  Let’s say we get the US dollar going down, it’s actually been going up the last year or so against those two currencies but let’s say that happens.  Stocks in those currencies are going to benefit by being priced in those currencies which tend to keep up with…

SPEAKER:  Or the other way when the dollar goes down.

ROGER CONRAD:  Right.  The dollar goes down, you’re going to get a nice bonus in these stocks and again it’s a nice way to hedge yourself. 

SPEAKER:  Why Canada and Australia? 

ROGER CONRAD:  Well, both of these countries are major producers of commodities so their currencies tend to follow prices of commodities tend to do better in inflationary environments, tend to do well when the dollar is declining.  Conversely they don’t do well when investors are rushing to the dollar as they did in 2008, as they did for awhile last year when people were talking about the fed tapering, raising rates and so forth, but longer term if you believe in or if you want some kind of protection against the kind of debt levels that we’ve taken on in this country, you want to go to some more fiscally-responsible countries that have currencies that are pegged to commodities that could benefit from more inflation, that’s where you go and you can buy productive assets which are basically companies that are growing their business and energy business is one place to look.

SPEAKER:  Are there a couple of names that you like right now?

ROGER CONRAD:  Well, I really like Brookfield Renewable Energy Partners and the symbol of that is BEP and it trades New York but again it’s a Canadian company, it’s the world’s largest hydro…

SPEAKER:  The regular New York Stock Exchange stock, not an ADR?

ROGER CONRAD:  Regular New York Stock Exchange stock.  Of course they have dual listing in Canada as well and they have hydro plants in the US, Canada, Brazil, and now Ireland so they basically build plants, buy plants, it adds to cash flow, they raise their dividends, they yield around a little over 5%.  They’ve been growing their dividend pretty close to 7% so nice combination particularly in a currency that is somewhat pegged or protected against inflation.

SPEAKER:  Thank you Roger.

ROGER CONRAD:  Hey, thank you.

SPEAKER:  Thanks for joining us at 

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