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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
260 54 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:

pipeline.kindermorgan.com

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.

LETS MAKE SOME LONG TERM MONEY HERE !!!
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ReplyMessage PreviewFromRecsPosted
260Hi mirage, After 13 days of straight up, its hard for any news to help the 14trobert b furman1last Thursday
259<i>I did not see the demand but now I do. Will be interesting if the markmiraje-last Wednesday
258I was thinking that these carbon capture credits can be sold by KMI. I have beeE_K_S-last Wednesday
257Market doesn't seem impressed. The stock is down 1.7% at present.miraje-last Wednesday
256The news about Kinder Morgan acquiring Texas oilfield assets in a carbon captureE_K_S1last Wednesday
255In dealing with options on KMI for several years, the set up today is more than robert b furman2May 17
254Hi E_K_S , You are pretty smooth and a better buyer than I. I had a $5.85 robert b furman1May 12
253I was waiting to see how PUMP gets their electricity? Diesel/Oil and/or NG poweE_K_S1May 12
252Good Morning E_K_S, Renewables being used by AI computing centers is almost an robert b furman1May 12
251Good Morning candsrr, My account is being transferred from TDA to Schwab this wrobert b furman3May 12
250Other pipeline companies breaking out too; WMB, PBA & ENB There is talk aboE_K_S-May 11
249>Thinking KMI will be in the 20's again by year end. I think, at least ccandsrr-May 11
248Hi E_K_S, I believe it is going to get better. I think Kinder was brilliant torobert b furman1April 18
247HiTom, Thanks for that recap. KMI is utility like, but with slowly growing grorobert b furman1April 18
246Here's what Value Line had to say the week of the change....................OldAIMGuy-April 18
245Hi Bob, I noted a week ago that Value Line has added Kinder Morgan (KMI, ~6+% yOldAIMGuy1April 18
244Re: KMI My AI does not cover KMI only WMB for some reason. KMI report looks goE_K_S-April 18
243Earnings are out and a small dividend increase: HOUSTON--(BUSINESS WIRE)-- robert b furman1April 18
242Another reason why I like KMI, beyond the global LNG export demand. Best part irobert b furman2April 6
241Hi E_K_S, Thanks. Just trying to knag with you buddy. I have learned a lot frrobert b furman-March 28
240Yes but you do it in SIZE! Great strategy on KMI & AMNF I have a large bE_K_S-March 28
239Hi E_K_S, Good to know. You work your high priced stocks much better than I dorobert b furman-March 28
238Thanks, this confirms what Schwab does after my discussion with their cost basisE_K_S-March 28
237Good Morning E_K_S, To be honest, I don't know exactly when the adjustment robert b furman-March 28
236Do you receive a 'corrected' 1099 every year that reflects the change inE_K_S-March 27
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