Texans have been living large off the land for more than a century.
Collecting royalties from the fountain of wealth that is it's vast oil and gas reserves and now, we too can get in on what Jeff Brown calls the “Texas Royalty Plan.”
The Teaser
Want to make $1 million per month in passive income? Move to Texas or listen to Jeff's hour-long video presentation.
Jeff is back at the helm of his namesake investment research service, Brownstone Research, and he's making the most of it.
Releasing a flurry of teasers such as Trump's New Dollar Companies and The Medical Holy Grail, which we have reviewed here.
While we were tempted to pack up and head South, we ended up taking in the video presentation, in the interest of readers.
What we learned is more than we ever wanted to know about Texas.
That it has the largest oil reserves of any state, more than double second place New Mexico. Is now pumping two billion barrels of oil more than it did seventeen years ago, so much for peak oil, and that a guy by the name of James Zeiss collects nearly a million dollars in “Texas Royalties” every month.
Jeff isn't teasing plain dividend stocks here, he's teasing good, old, Master Limited Partnerships (MLPs) i.e. oil and gas royalty trusts.
These bad boys have been around since the mid-1950s, own royalty interests in producing wells, oil fields, mines, and in return for favorable tax treatment (they don't pay any) are required to distribute 90% of their annual profits to unit holders.
Similar to Real Estate Investment Trusts (REITs), MLPs offer steady, reliable income at yields that are closer to the real rate of inflation, and not the S&P's median 1.1%.
Stodgy, boring, and effective, just the way we like it.
But Jeff says things are about to get a whole lot more exciting, because Texas royalty payments are on the brink of “the mother of all bull markets“, thanks to a big move by Elon Musk!?
The Pitch
All the stocks that could be the biggest winners of Texas’s boom are in a new report called The Texas Royalty Plan: How to Collect Steady Income from the Lone Star State.
It's ours if we join The Near Future Report, Jeff's monthly newsletter focused on the best new tech stocks.
Membership costs $179 upfront for the first year and comes with an ironclad 30-day money-back guarantee.
Texas is the New Silicon Valley
It turns out that Elon Musk's big move was literally his move.
In 2021, growing tired of California's stifling regulations and high taxes, Musk relocated Tesla's HQ to Austin.
Last year he finished the job, announcing that both SpaceX and X will also relocate to the Lone Star State.
As it turns out, Musk was just a sign of things to come.
All told, more than 200 major companies have made the move to Texas since 2020, and something bigger than all of them could be next.
A series of sales tax exemptions, abatements, and $1 billion in subsidies are transforming Texas into the data center capital of the world.
Data City
This isn't just a clever headline I came up with, although I do have a way with words.
It's the name of a 50,000 acre plot of land just outside the city of Laredo, that is the world’s largest renewable-powered data center hub.
The first million square feet of data center space will begin to be leased out next year, with as much as 5 gigawatts of power expected to gradually come online.
This is all well and good, but what does it have to do with Texas Royalties?
Data centers are notorious energy hogs, with a single hyperscale AI data center requiring as much energy as the entire city of Denver, Colorado.
Natural gas is the most cost-effective way to meet the enegy requirements of data centers and Texas is the leading producer of the odorless and colorless compound.
Thus, it follows that more and more data center owners will make Texas their homebase.
Record demand for energy meeting the state best-equipped to supply it means there's never been a better time to enroll in the “Texas Royalty Plan” and Jeff is going to show us the best ways to do so.
Revealing Jeff Brown's Texas Royalty Plan Stocks
The clues we got were less than the cost of a budget-friendly brisket in Amarillo.
First, absolutely nothing, nada, zilch, is mentioned about the top MLP pick.
However, we sifted through our tracker of previous picks like a rack at a vintage store, this combined with the very limited universe of oil and gas MLPs makes me think that the Jeff's top pick is Energy Transfer LP (NYSE: ET).
Second, only a few precious breadcrumbs of data were provided about the natural gas stock picks. Here is what I mean:
First Natural Gas Stock
- This company owns critical natural gas infrastructure and is invested in some key AI nuclear projects.
Normally, this wouldn't be enough to go on and it still may not be, but Jeff could be teasing Constellation Energy Corp. (Nasdaq: CEG) here.
- Besides owning and operating three dual-fuel facilities, Constellation also operates the largest fleet of nuclear plants in the United States.
Second Natural Gas Stock
- It is a leading producer of natural gas turbines.
- Just partnered with Chevron to build natural gas plants to service data centers.
GE Verona (NYSE: GEV) is the pick.
- GE Verona owns the world's fastest-growing fleet of gas turbines, with more than 175.
- It's joint venture with Chevron was established to build natural-gas power stations for AI data centers in the U.S.
Earn 7-9% for the Next Two Decades?
Jeff Brown's Texas Royalty Plan touches on a familar, but all important theme – the growing demand for computing and the energy needed to supply it.
Right now, about 4.5% of all the energy produced in the U.S. goes toward data centers.
By 2030, this figure is projected to more than double to 12% of total U.S. energy production.
Texas is the nation's top energy producing state, so Jeff's macro thesis is on the money.
However, are his energy picks the best way to play it?
Energy Transfer LP: One of largest and most diversified midstream energy companies in the country. The stock has underperformed so far this year, but at less than 2x book value with an 8% annual yield, we can afford to wait for the market to revalue.
Constellation Energy: Riding high off its Meta and Microsoft partnerships, the stock has outperformed. The stock is not cheap, but its nuclear focus should take it even higher.
GE Verona: 51x forward earnings is too rich a price to pay for an energy equipment manufacturer
Despite trailing the market and the other picks, Energy Transfer is the best long-term bet of this trio and a no-brainer for earning a steady, above-average yield for decades to come.
Quick Recap & Conclusion
- Jeff Brown says we too can get rich as a Texas oil baron by subscribing to something he calls the “Texas Royalty Plan.”
- What Jeff is really teasing is publicly-traded Master Limited Partnerships (MLPs), which collect royalties from their ownership interests in operating oil fields, wells, and mines, and pay 90% of their earnings to shareholders.
- All of Jeff's picks are named in a new report called The Texas Royalty Plan: How to Collect Steady Income from the Lone Star State. It's ours if we join The Near Future Report monthly newsletter, which costs $179 upfront for the first year.
- Zero info was provided on the top MLP pick and very little on the two natural gas stocks being teased. However, through some enterprising scuttlebutt we were able to reveal them for free – Energy Transfer LP (NYSE: ET), Constellation Energy Corp. (Nasdaq: CEG), and GE Verona (NYSE: GEV).
- Despite it's temporary underperformance, Energy Transfer LP is still the best bet for long-term outperformance.
Will Texas become the data center capital of the world? Tell us what you think in the comments.