Kinder Morgan, Inc. (NYSE:KMI)

CAPS Rating: 5 out of 5

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Member Avatar looklistenlearn (< 20) Submitted: 10/13/2014 5:50:17 AM : Outperform Start Price: $36.49 KMI Score: +3.83

The confluence of the consolidation plans, the turmoil in the energy markets and the nervousness in the broader market has presented an opportunity.
KMI already has a utility like cf, dividend. They have predicted excellent dvd growth and is run by one of the best in the business. Add to that they have no exposure outside North America and that we're adding a million barrels a year of combined capacity and you have what appears to be a long term core holding. This doesn't suggest that the bottom is in or that we will not see volatility in this name but as an intermediate or long term call I can't see anything not to like.
I have an old long position in KMP, KMI and 3/15 $40 calls and $30, $35 and $40 1/16 calls.

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Member Avatar dschleicher (83.59) Submitted: 10/11/2014 11:56:02 AM : Outperform Start Price: $36.49 KMI Score: +3.83

4.5% yield and being the toll-taker on the mega trend of moving from coal to gas sounds great to me!

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Member Avatar bartlettmi (67.85) Submitted: 10/8/2014 12:53:41 PM : Outperform Start Price: $37.56 KMI Score: +2.38

I'm not sure if the Fool gives credit for dividends, but I expect this one to outperform the S&P500 even without dividends. Its simpler capital structure and opportunity to grow should be rewarded. Additionally, it boasts one of the best management teams in the industry.

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Member Avatar deadrock (47.23) Submitted: 10/2/2014 11:22:48 AM : Outperform Start Price: $38.60 KMI Score: -0.48

new structure should produce above average dividends and profits

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Member Avatar ViktorBorsodi (< 20) Submitted: 9/30/2014 3:11:04 PM : Outperform Start Price: $38.23 KMI Score: +2.40

The shale gas revolution will drive growth for this midstream oil and gas company. The large amount of petroleum that's going to be produced, must be transported. It's undervalued based on its peg ratio and its p/s ratio compared to the 5 year average.

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Member Avatar notyouagain (60.51) Submitted: 9/22/2014 4:39:33 PM : Outperform Start Price: $37.39 KMI Score: +6.16

First, because it's just so easy to forget to mention it later, I always like to take note of my initial start price...$37.39.

This is important because years from now, that start price should have eroded quite a bit from coming dividend payouts. KMI plans to increase the current dividend by 16% soon then increase it by 10% a year through 2020, which will take the annual dividend from $1.72 at present up to $3.22 in 2020.

So for $37.39, this is like having a guaranteed yield on cost of 8.61% in 6 years...and that's without even reinvesting dividends! Reinvesting dividends will ramp that up a LOT!!!

THE BEST long-term dividend growth investments all usually have dividend yields in what I'll call the 'sweet spot'....yielding anywhere from around 2.5% up to around 3.5%...apparently this usually gives them a payout ratio with some room to maneuver, to pay their dividend and still be able to fund new growth initiatives.

I like market-leading financial stalwarts with low payout ratios, durable competitive advantages, and interest coverage ratios that make looking at debt/equity ratios seem like a silly waste of time. Total returns and yield on cost steadily increase, year after year. The steadily declining dividend-adjusted prices you'll find for these companies when you go to Yahoo!Finance and look them up under 'Historical Prices' provides a playground for the mind.

When you go to Yahoo!Finance and look up a company like KO, PEP, CVX, IBM, HRL, JNJ, XOM, CLX, MSFT, and click on 'Historical Prices", and go back 10, 15, or 20 years, (WHY would you do that? I'M TELLING YOU!!) you are greeted by a page with many columns for each date. First, there is the price the stock opened at on that date, then the high, low, and close prices for that date.
Then - skipping over past "Volume" - which I care nothing about - is the "Adjusted Close" column. This is one feature that Yahoo!Finance has that will always keep me coming back.
The "Close" column lists the actual price the stock closed at on that date.
The "Adjusted Close" assumes you bought shares on that date at the closing price, and held them until the present, reinvesting dividends.

The "Adjusted Close" is adjusted for dividend and splits in exactly the same manner your CAPS start prices are....dividends are assumed to be reinvested at ex-dividend day opening prices. If you look up a company's "Adjusted Close" for a date 20 years ago, then look up the "Adjusted Close" for the same date again after the next dividend payout, it will have adjusted downward. These numbers never stop changing, unless the company never pays a dividend and never splits.

Anyway, looking at the "Adjusted Close" prices from 10, 15, and 20 years ago for great dividend-paying companies that have market-leading brands and/or durable competitive advantages that have stood the test of time and have the numbers to prove it can be inspiring. Can you imagine telling people the dividend-adjusted price for your CVX shares you bought 20 years ago was less than $9...and that your yield on cost was nearing 50% annually?

Now...where do my thoughts on KMI fit into this?

Here's where. If you do as I say, and go have a peek at some of the "Adjusted Close" prices from 10 or 15 years ago for some of these favorite dividend growth stocks, notice the spread between the "Close" and "Adjusted Close".

How wide this spread is depends on several moving parts:
The size of the dividend to start with (DON'T BUY PUNY DIVIDENDS!!)
Dividend growth, and
Any splits between the past date and now.

Great dividend growth stocks have an impressive spread between their "Close" and "Adjusted Close" prices, but most of them got that spread without having given their investors a GIANT head start with a current dividend yield halfway between 4% and 5%!!!!

KMI's dividend RIGHT NOW offers the same yield a great company such as an IBM or MSFT would have to be held for several years before the yield on cost would equal it.

By 2020, KMI's "Adjusted Close" price for today will be far, far less than half of its then-current price. Far less. Mark my words.

And I do have pressing matters to attend to, so I have to go. My prospectus for KMI's direct stock purchase plan (DSPP) (available at Computershare) just arrived in the mail.

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Member Avatar foolsz (< 20) Submitted: 9/9/2014 3:21:42 PM : Outperform Start Price: $38.35 KMI Score: +3.22

kinder morgan is like the oracle of omaha when it comes to energy stocks =]

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Member Avatar apocolypse45 (< 20) Submitted: 9/6/2014 4:21:19 PM : Outperform Start Price: $39.26 KMI Score: +1.65

Consolidation and strong leadership

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Member Avatar desdev (< 20) Submitted: 8/31/2014 12:46:14 AM : Outperform Start Price: $40.31 KMI Score: -0.92

The consolidation of all things Kinder should help KMI fuel acquisitions and organic growth going forward. The discussed dividend hike is also a bonus.

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Member Avatar NWVillager (78.60) Submitted: 8/30/2014 1:15:06 AM : Outperform Start Price: $40.31 KMI Score: -0.92

Energy infrastructure buildout.

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Member Avatar jdmetz (43.13) Submitted: 8/17/2014 10:31:12 AM : Outperform Start Price: $41.16 KMI Score: -4.99

It is taking steps to consolidate it's business in an industry it is already a large player in.

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Member Avatar EvanBuck (99.77) Submitted: 8/13/2014 11:45:34 PM : Outperform Start Price: $38.73 KMI Score: -0.33

The merger will allow Kinder Morgan to save billions on taxes and become even more of a cash machine. This article does a great job of summarizing the bull case for the company: http://www.fool.com/investing/general/2014/08/11/why-the-kinder-morgan-merger-makes-it-one-of-the-b.aspx?source=itxsitmot0000001&lidx=3

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Member Avatar griderX (96.59) Submitted: 8/12/2014 1:40:44 PM : Outperform Start Price: $38.48 KMI Score: -0.12

Dividend Watch List.

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Member Avatar TMFDeej (99.29) Submitted: 8/11/2014 10:03:16 AM : Outperform Start Price: $39.50 KMI Score: -2.30

Kinder Morgan made a smart move, silencing its critics and consolidating all of its various MLP entities under one roof so to speak. The decision should lower the company's cost of capital significantly. Based on KMI's distribution target for 2015, were it to trade in-line with its competitors in terms of yield this would be a $45 or so stock, so there's still some upside plus a 4%+ distribution that's growing at around 10% per year here. Not bad.

Jason

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Member Avatar SATXUSA (< 20) Submitted: 8/10/2014 8:40:45 PM : Outperform Start Price: $42.41 KMI Score: -9.24

Huge Moat

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Member Avatar Naxias (27.54) Submitted: 8/1/2014 2:44:42 PM : Outperform Start Price: $35.64 KMI Score: +7.67

Insider buying, good cash flow, utility-like business, attractive price point, all look good. Only open question is whether the SP500 rally will continue to trounce my picks. ;) I have real-world cash on this pick.

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Member Avatar counsellor76 (< 20) Submitted: 7/30/2014 5:36:24 PM : Outperform Start Price: $37.12 KMI Score: +4.73

gros is up. Dividend is fantastic.

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Member Avatar RLBOWERSOX (96.24) Submitted: 7/8/2014 10:23:43 AM : Outperform Start Price: $35.10 KMI Score: +11.17

Has positioned itself to be a major mover of oil and gases as anticipated requirements are generated.

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Member Avatar fooluser17 (< 20) Submitted: 6/28/2014 9:10:54 PM : Outperform Start Price: $35.71 KMI Score: +8.93

$36.04 decent divs PEG 3.3 :( payout ratio high @ 139% currently P/E also slightly above target @ 31

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Member Avatar tiobueno (99.52) Submitted: 6/4/2014 9:06:39 AM : Outperform Start Price: $33.54 KMI Score: +14.30

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