September 14, 2013
– Comments (4)
Kinder Morgan, KMP, pays a nice 6.6% dividend and has a five star CAPS rating. However, it shows a payout ratio of 720%. How can that be? What am I missing?
Holy Cow, Yahoo has it at-
I really have no clue but I'll add to caps just to see what happens.
Something's gotta be off with the numbers. Also from Yahoo, ttm earnings of 3.08 per share, trailing annual dividend 5.17 should be a ratio of about 165%.
Even though that's a high ratio, it's not as bad as it looks. Master Limited Partnerships tend to have a lot of non-cash expenses like depreciation that reduce earnings but not cash flow and they usually make distributions based on cash flow.
That's Morningstar data, right?
That does seem a little high. On Scottrade they show a Payout Ratio (TTM) of 99.6
Div Payment: $2.53B
Net Income: $1.36B
Payout Ratio: 185%
Div Payment: $1.47B
Net Income: $1.8B
Payout Ratio: 82%
2012 included a big non-cash expense (adjusted earnings were closer to $2B)
2013 has included a non-cash earnings gain (adjusted earnings are closer to $1.1B.