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   Technology StocksKMI- a fallen high dividend yielder - for how long?


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To: GwenJohn who wrote (24)12/22/2016 2:06:47 PM
From: robert b furman
   of 156
 
HI Gwen,

Excellent post and Thank You for the post.

I took my lumps on the Warrants today, as time is running out and the tax loss selling is depressing the price - should have done it month's ago.

Lack of thinking it through.

I'm actually impressed with KMI's recovery.

No doubt in my mind that the next administration will encourage big investments in energy with little sandbagging.

KMI reapplying the cash flow in this friendly reinvestment time period will yield big and consistent dividends well into the future.

This is a buy and hold long term stock for me. Always was and always will be.

I'm thinking 2018 will reward us with a better and bigger dividend and in between management needs to make money and cash flow for reinvestment in the best most profitable opportunities.

Bob

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To: GwenJohn who wrote (24)12/23/2016 7:00:45 AM
From: alanrs
   of 156
 
Nice to see a new poster not generating the spam limit, first thing out of the gate. Welcome.

Having no idea where the stock is going (referencing the 70-20-10 rule, whereby 10 is company specific) KMI seems a safe bet as an income producer and capital protector, for reasons you and others have pointed out. Not very exciting but sometimes the options premiums are worth looking at.

ARS

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To: alanrs who wrote (26)8/21/2017 12:53:30 PM
From: robert b furman
   of 156
 
Hi alanrs,
I may be making a mistake - but I'm betting on the scheduled dividend increases thru 2020 to take place.

I have sold March 2018 $19.00 puts for 1.42 to 1.50 (they have traded as high as 1.64) last week.

If KMI makes good on their 60% dividend increase for 2018,then they'll be paying 80 cents in 2018.

$19.00 - 1.50 = 17.50 .80/17.50 = 4.57 dividend yield.
If they continue the 25 % increase into 2020 then the dividend yield will be 7.14% 2 and 4 months out years out.
Articles like this make me think KMI is not only already big in exporting natural gas to Mexico but they have new expansion coming on soon. If they get capacity constrainied adding additional pipe capacity is inexpensive vs buying up more right of way and easements.
Natural gas exports to Mexico, which have been increasing across the U.S. border since 2010, reached near-record highs this year through May, averaging 4.04 billion cubic feet per day, up from an average of 3.78 billion in 2016. The U.S. had an energy trade surplus with Mexico of more than $11 billion last year. The value of U.S. energy exports to Mexico in 2016 was more than twice the value of the energy imports.



The U.S. is emerging as a net natural gas exporter with exports exceeding imports in three of the first five months of this year, putting the U.S. on course to reverse 60 straight years during which the nation was a net importer.



At least 17 pipelines carry more than 4 billion cubic feet of natural gas daily to Mexico, with four additional cross-border pipelines to be completed over the next two years and many more planned after that. While the U.S. still is a net gas importer from Canada, exports to eastern Canada have steadily increased since the completion of the Vector Pipeline in 2000.

The story has been similar for liquefied natural gas, or LNG. Last year, Cheniere Energy Inc. shipped the first cargoes from its Sabine Pass terminal in Louisiana, marking the start of LNG exports from the lower 48 states. Sabine Pass averaged a record 1.96 billion cubic feet per day of exports in May, according to the EIA. Numerous domestic LNG export projects are in development by companies such as Dominion Energy Inc.

There’s been a gradual and sustained increase of exploration activity in Mexico, particularly in deepwater regions. The number of active offshore exploration rigs in Mexico reached a 10-year high in June 2017, and the sector may be only just beginning to see the effects of the energy reforms. Mexico began deregulating the industry in 2013 amid declining domestic gas production.

Bob

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To: robert b furman who wrote (27)8/21/2017 1:25:30 PM
From: alanrs
   of 156
 
I still own 600 shares but have not been selling options much recently. I'm okay with KMI long term although I don't follow it closely. I made some cushion a while back and figure the dividend is secure. Not much to say, one of those watch the grass grow companies I hope.
ARS

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To: alanrs who wrote (28)8/21/2017 1:51:12 PM
From: robert b furman
   of 156
 
I held all of my KMI.
Perhaps it is because I have lived in Houston since 1981 and know people who have done pipeline work for KMI.

They are in the sweet spot of fracking in Eagle Ford and Permian.
The Permian has the lowest cost oil and is basically the growth of oil fracking in the US.
Their CO2 business was basically dead in 2016 and the
Permian is now reusing CO2. Exxon just spent 1/2 billion buying permian properties. This business will begin to be accredive and go for a long time.
They are well positioned to export to Mexico (the largest player).
They are the pipeline that transports LNG to Chnierre and their export terminal - which is now exporting .

I've read articles that talk about cmpanies that suspend their dividend become fast dividend growth companies after they've shored up their buisness.
Natural gas is certainlt a big growth market and KMI has reduced their debt burden fairly quickly.

I'd like to get a bunch of it and watch the dividend stream come on over the next 5 years.

I bet it will put a smile on my face for the rest of my retirement.

Bob

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To: robert b furman who wrote (29)8/21/2017 2:02:24 PM
From: alanrs
   of 156
 
I rely on you to know this stuff, that's why I don't have to. My cost is $22.06. With the trading cushion and dividend so far, I'm down about $100 and that's not so bad all things considered. I'm patient. Investments in the 10k range are my comfort zone, roughly where this one is.

ARS

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To: alanrs who wrote (30)8/21/2017 2:13:10 PM
From: robert b furman
   of 156
 
Hi alanrs,

I rely on you to know this stuff, that's why I don't have to

You are in trouble!

I'm right there at cost too.
Some 17.50's would be a nice average down - wouldn't mind keeping the 1.50 either.

I like the March's because by that time KMI will have announced their intended dividend rate (I'm guessing).

I don't think anyone is thinking that far forward or they are all once bit twice shy!

Either way a good opportunity I think.

Bob

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From: miraje2/20/2018 1:01:44 PM
   of 156
 
Is anyone still holding this thing? I've ridden it down since the divi slash and wonder if it will ever find a bottom. Motley Fool keeps touting it as it keeps dropping. Guess investors no longer trust KMI management.

I do know that if I get fed up and dump it, which I'm about ready to do, that will definitely mark the bottom and it will finally start to climb back.. :-(

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To: miraje who wrote (32)2/20/2018 1:38:14 PM
From: robert b furman
   of 156
 
Hi Miraje,

I'm still holding the bag on this one.

I am in anticipation of them announcing the new 80 cent annual dividend for the next 4 quarters after this last 12.5 cent dividend.

I have also sold some 18.00 puts far out into January 2019.

If assigned to me they will be very nice dividend growth stocks - if their projected dividends are actually paid out in 2019 and 2020.

One thing for sure the pipelines are becoming fuller as:

Gas continues to displace coal in electrical generation - especially in Houston

Exports to Mexico grow.

Exports of LNG from Chenierre are now being made

A huge build out of plastics plants continue to be built in Houston.

The Permian and Eagle Ford fields continue to be restricted to drilling activity until flaring is minimized 9 In KMI's back yard.

This is the largest network in the US that took on too much debt when it left its MLP statusand at the same time a downturn of generational pain all accross the energy sector took place.

Although I was put some 22.50 and 25.00 stocks when the dividend slah took place - I'm currently of the mindset this is a buy and hold, that with time, will more than reward my patience.

If you sold 18.00 puts and got 2.35 for them the net purchase price would be $15.65.

Next years dividend (if done as stated) will yield 5.11 %

I like it from a long term buy and hold basis.

Average down and watch it pay like a slot machine - I hope!

GULP

Bob

The claimed dividend for 2019 will be 1.00 and that will yield 6.39.

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To: robert b furman who wrote (33)2/20/2018 3:06:24 PM
From: miraje
   of 156
 
Hi Bob,

Next years dividend (if done as stated) will yield 5.11 %

Couple of clichés come to mind..

Fool me once, shame on you.
Fool me twice, shame on me.

Or..

Once bitten, twice shy..

Think I'll hold on to my shares, for now, and take a wait and see attitude on the divi increase. If they do come though as promised, that will kick start the share price upwards for sure. Really don't think it will go much lower from here..

Regards, JB

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