Welcome, everyone, to this week’s Byte!


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Now, let’s move on to this week’s Byte.


Market volatility and rising yields have opened up some interesting investment opportunities. So, this week, I’m bringing you two ideas outside the tech sector: a REIT and a natural gas company. Both offer potential diversification if you’re looking to broaden your portfolio beyond technology stocks.


Stock # 1 – Healthpeak Properties (DOC)

Healthpeak Properties (DOC) owns a diversified healthcare real estate portfolio of nearly 700 properties, primarily comprising medical office buildings and life sciences assets, along with a smaller senior housing portfolio through its equity investment in Janus Living.


If you’ve been following my Bytes, you may remember that I wrote about Real Estate Investment Trusts (REITs) in August, and DOC is one of them. To learn more about what REITs are and how they work, check out Bytes #63 and #64, both readily available on my website.


Why I Like DOC

  • Industry tailwinds: DOC benefits from long-term trends such as an aging population and regulatory changes that expand the pool of participants in the healthcare system.
  • Diversified revenue streams: Its portfolio spans outpatient medical, senior housing, and life sciences. The first two segments have delivered steady results, while life sciences occupancy is showing early signs of recovery despite ongoing sector headwinds.
  • A solid financial position: DOC is in good shape from a liquidity and solvency perspective, backed by an S&P BBB+ credit rating. It has $4.1 billion in liquidity and a relatively low net debt-to-adjusted EBITDA ratio of 4.7x. Its dividend yield of approximately 6.5% is supported by a payout ratio of around 70%.
  • Steady operating performance: In Q2 2026, funds from operations (FFO) per share remained unchanged year over year at $0.46. Overall occupancy improved by 20 basis points sequentially to 90.7%. More notably, life sciences occupancy increased by 140 basis points from the beginning of the year to 78.5%.
  • An attractive valuation: At approximately $18.85 per share, DOC trades at around 10.65x forward FFO, well below its historical P/FFO multiple of 14.0x. The recent price weakness, partly driven by rising interest rates, may present an attractive entry point. This is a familiar challenge for REITs, as higher interest rates can put pressure on their valuations.


What to Look for in Q3 Results

Keep an eye on the life sciences portfolio for further signs of improvement. This segment has been under pressure due to new supply coming into the market.

Outpatient medical and senior housing should continue to provide stability and growth. Also, watch the leasing economics, particularly positive re-leasing spreads and healthy rent escalators, which can support future revenue growth.


Key Takeaway

DOC remains an interesting option for income-focused investors, offering a combination of a high current dividend yield and potential long-term capital appreciation.

Yes, its life sciences portfolio is still in recovery mode, but continued improvement here could become a growth catalyst.

Rising interest rates remain a headwind for REITs, so rather than trying to time the bottom, a dollar-cost averaging approach could be worth considering. It allows you to build a position gradually while potentially locking in an attractive monthly income stream and participating in future capital appreciation.


Stock # 2 – EQT Corp (EQT)

EQT Corporation is involved in the exploration, production, gathering, and transmission of natural gas and other hydrocarbons.

The company primarily operates in the Appalachian Basin, selling natural gas, natural gas liquids, and oil to marketers, utilities, and industrial customers. It also provides marketing services, manages contractual pipeline capacity, and engages in risk management and hedging activities.


Why I Like EQT

  • Exposure to the AI build-out: In Byte #66, where I discussed the AI build-out, I mentioned both EQT and Expand Energy as companies operating in the natural gas (NG) space. I also highlighted the behind-the-meter investment theme. Hyperscalers cannot always wait years for regulated utilities to build new substations and transmission infrastructure. One alternative is to secure power directly from independent power producers (IPPs), including arrangements supported by natural gas supply. As electricity demand grows, reliable natural gas supply could become an increasingly important part of the energy mix supporting data centers.
  • Scale and vertical integration: EQT is one of the largest natural gas producers in the United States and owns midstream infrastructure. Its vertical integration, contiguous land holdings, and economies of scale help drive operational efficiency and provide a competitive advantage. Its low-cost position in Appalachia could also help it benefit from growing LNG exports and data center demand.
  • Strong cash flow and financial metrics: EQT's financial profile is supported by a reported free cash flow yield of approximately 11.5%, a debt-to-equity ratio of 0.21, and a profit margin of 29.2%. The company generated approximately $2.5 billion in free cash flow attributable to EQT in 2025 and $2.2 billion in the first half of 2026.


Commodity Risk Prevails

The reason EQT offers a double-digit normalized free cash flow yield becomes clearer when you consider the underlying commodity risk: natural gas prices can be extremely volatile.


Warmer winter weather, high gas storage levels, rising production, or declining industrial and electricity demand can all put significant downward pressure on natural gas prices.


Another factor to consider is EQT's production mix. Dry natural gas generally commands a lower price per unit of energy than natural gas liquids (NGLs). EQT's production mix is approximately 94% dry gas and 6% liquids, including oil and NGLs, leaving its realized pricing heavily exposed to natural gas prices.


In Q2 2026, EQT's sales volume grew significantly year over year, from 568 Bcfe to 634 Bcfe (billion cubic feet equivalent). However, its average realized price declined from $2.81 to $2.65 per Mcfe.

Despite the higher volumes, net income attributable to EQT declined sharply year over year, reflecting changes in derivative results and realized pricing.


This is a good reminder that producing more does not automatically translate into higher profits when commodity prices and hedging results move against you.


Key Takeaway

EQT is a cyclical natural gas company, and that comes with both opportunity and risk.


Lower natural gas prices and the inherent risks of a cyclical business help explain why the market may be assigning it a discounted valuation.


However, if you believe in the continued AI build-out and growing natural gas demand in the US and abroad, EQT offers an interesting way to participate in that theme.


Using Value Line's projected 2027 EPS of $4.90 and its target P/E multiple of 14.5x, EQT's estimated 12-18 month price target is approximately $71 per share, representing potential upside of about 34% from current levels.

There could be meaningful upside if demand grows, natural gas prices improve, and the company continues to operate efficiently while maintaining capital discipline. But remember, the investment thesis depends on more than just AI demand. Commodity prices, production costs, and capital allocation will also play a significant role.


Wrapping Up

I hope you enjoyed this week’s two ideas for diversifying beyond tech!


As always, I’d love to hear your thoughts. Your questions and pushback are what make these Bytes better.


Just a reminder: the thoughts shared in this Byte are meant to help you think more clearly about investing, not to tell you what to buy or sell. Every investor’s situation is unique, so please do your own due diligence before making any investment decisions.


Cheers,


Pooja