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Technology Stocks
KMI- a fallen high dividend yielder - for how long?
An SI Board Since March 2016
Posts SubjectMarks Bans Symbol
74 47 0 KMI
Emcee:  robert b furman Type:  Moderated
Kinder Morgan is the countries largest pipeline company in the US.

It has recently reduced its dividend to be able to internally fund and expand its operations - primarily the transporting of natural gas.

With the natural gas resources growing from the innovation of fracking technologies there is a mega trend at work with increasing uses of natural gas.

These growth areas are the result of four long term growth categories:

Electrical generation that is replacing coal fired plants with that of natural gas
Exporting of Natural gas to Mexico
Industrial use of natural gas in making hydro carbon based products
The exporting of LNG to world markets.

KMI currently has the largest distribution network in the US.

KMI sees a huge growing demand for more pipelines to serve the above four growth sectors.

The need for additional capital has forced a reduction of the dividend so that funds can be raised internally.

The application of these funds have been diverted from dividend streams to future growth projects.

I propose that after the expansion phase of their pipeline system is accomplished a strong dividend policy will be reintroduced.

To accumulate KMI shares during this stock price weakness is an opportunistic, but long term investment that will pay dividends into the long term future at above market yields.

The price weakness started when KMI announced it was buying (along with Brookfield Infrastructure)the remaining assets of the troubled Natural Gas Pipeline of North America:

Kinder Morgan, Inc. ( KMI) and Brookfield Infrastructure Partners L.P. (NYSE: BIP, TSX: BIP.UN) today announced a definitive agreement whereby they will jointly acquire, from Myria Holdings, Inc., the 53 percent equity interest in Natural Gas Pipeline Company of America LLC (NGPL) not already owned by them for a total purchase price of approximately $242 million. KMI will pay approximately $136 million and increase its ownership interest from 20 percent to 50 percent, and Brookfield Infrastructure will pay approximately $106 million and increase its ownership from approximately 27 percent to 50 percent. The transaction values NGPL at a total enterprise value of $3.4 billion, inclusive of existing debt.

Kinder Morgan, Brookfield Infrastructure to Acquire Myria Holdings Inc.'s Majority Interest in Natural Gas Pipeline Company of America

At this point Standard and Poors has put KMI on a credit watch and that has caused the reduced dividend - which was needed to shore up KMI credit rating.

This is where present and future LNG ports to export LNG are located - well within KMI'S pipeline presence.

This is a description of the assets bought by KMI and Brookfield:

One can easily see that Kinder has added to their existing network a 9200 mile pipeline that is well situated to grow Mexico exports and LNG exports as well as electrical generation plants and industrial plants for converting hydrocarbons to many products.

Once again this is a long term plan, and huge in scope.

It will be a long term dividend growth retirement plan for me.

I encourage others to join in the study of this expansion and critique weaknesses that may be mentioned.

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ReplyMessage PreviewFromRecsPosted
74KMI shares rise as Richard Kinder buys 300K shares Nov. 1, 2019 11:13 AM ET|AbouE_K_S-November 1
73Sounds neat, Keep me updated. I'm thinking of using evacuated tubes for herobert b furman-October 16
72Ok good to know. Plan to pay cash for the project estimate it to run $300K-$350E_K_S-October 16
71HI E_K_S, By the time they get both permian pipelines built (although they are robert b furman-October 16
70KMI my No. 3 portfolio position. Was looking at selling 20% of my top 10 holdinE_K_S-October 16
69Hi E_K_S, Kinder is now pumping LNG out of elba island and one of the Permian probert b furman1October 16
68Kinder Morgan Q3 2019 Earnings Preview Oct. 15, 2019 5:35 PM ET|About: Kinder ME_K_S-October 16
67One great big accomplishment - Let the free cash flow BEGIN !! Kinder Morgan strobert b furman-September 25
66Hi E_K_S, Thanks for the great update. As this keeps up, I'm going to haverobert b furman-August 1
65Kinder Morgan's Gulf LNG project wins U.S. approval for exports Aug. 1, 2019E_K_S-August 1
64Hi E_K_S, I have finally averaged down to be above my cost by less than a buck.robert b furman-March 27
63Kinder Morgan downgraded at Citigroup on valuation Mar. 27, 2019 3:19 PM ET|AbouE_K_S-March 27
62With that lawst Buy, I got out of all my high cost $30.shares and replaced them E_K_S-12/18/2018
61Great buy E_K_S! We'll be grinning like a chessie cat when that $1.25 dividrobert b furman-12/18/2018
60Another 25% Buy for KMI at $15.49/share that reflects the completion of my sharE_K_S-12/18/2018
59Kinder Morgan sees 10% growth in distributable cash flow next year to $5B Dec. 3E_K_S-12/3/2018
58Right kind of thinking Eric, Bobrobert b furman-10/26/2018
57Did another Sell (9/5/2018) of KMI @ $17.62/share and bought back 50% of those tE_K_S110/26/2018
56After 31 days was able to buy back my shares sold at $17.75/share for $17.62/shE_K_S-8/7/2018
55Hi E_K_S, I have some 200 at 35.00 and the rest were assigned from some $25.00 robert b furman-6/29/2018
54Some tax loss harvesting. Sold 40% of KMI at $17.75/share w/ the expectations tE_K_S-6/29/2018
53One analyst believes that the sale of the Trans Mountain Pipeline is a sign of mfred woodall-6/28/2018
52Not totally sure of how a fixed fee is defined. I'm guessing that a minimumrobert b furman-6/18/2018
51Are most of their pipelines contracted for 'fixed fee" now or can they E_K_S-6/18/2018
50Its Bullish. Pipeline companies are adding lubricity to the oil so it flows thrrobert b furman26/17/2018
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