I haven't added to KMI since March of this year. The price has come down recently and I decided I had a good opportunity to add additional shares. I also noticed several other bloggers have picked up shares recently.
Kinder Morgan, Inc. (KMI) is the general partner of both El Paso Pipeline Partners (EPB) and Kinder Morgan Energy Partners (KMP). The CEO, Richard Kinder owns and continues to buy KMI. I like KMI because of the tax treatment and their plans to increase the dividend at a fast pace, likely 9-10% per year. Their 4th quarter payment of .41 is 13.9% higher than their 4th quarter payment of last year of .36. At 9% dividend growth and a starting dividend of 4.7%, KMI's 10-year YOC would be 11.1% which is greater than the 10% I like to look for.
I purchased 85 shares @ $34.709/share this week.
Shares are currently yielding 4.7%. Their dividends have been increasing every quarter! They have paid out 0.37, 0.38, 0.40, 0.41 this year including the payment that goes through on 11/15.
I now have 200 shares of KMI that will produce at least $328 in dividends next year.
My portfolio weight in the Energy sector is now a little high at 16.7%. This is ok because I have a long ways to go in building my portfolio. I don't mind going a little overweight while these energy companies have good valuations.
From E*Trade:
Kinder Morgan, Inc. (KMI) owns and manages a diversified portfolio of energy transportation and storage assets. The Company operates in five business segments: Products Pipelines-KPM, Natural Gas Pipelines-KMP, CO2-KMP, Terminals-KMP and Kinder Morgan Canada-KMP. The Company through Kinder Morgan Energy Partners, L.P. (KMP) operates or owns an interest in approximately 37,000 miles of pipelines and approximately 180 terminals. These pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide and other products, and its terminals store petroleum products and chemicals, and handle such products as ethanol, coal, petroleum coke and steel. The Company is a provider of carbon dioxide (CO2), for enhanced oil recovery projects in North America. On May 25, 2012, KMI acquired El Paso Corporation. In August 2012, Kinder Morgan Energy Partners, L.P. acquired Tennessee Gas Pipeline (TGP) and a 50% interest in El Paso Natural Gas (EPNG) pipeline from KMI.
Nice pick up. I like KMI (and KMR) as well and have been adding to both. Both have had 3 dividend increases this year! Awesome.
ReplyDeletecheers,
AA
Hi AA,
DeleteThanks. Both look good but I picked KMI due to tax treatment and hopefully faster dividend growth.
Take care!
Nice, I am getting some KMI also later today with FIRP from scottrade.
ReplyDeleteFFdividend,
DeleteNice job on picking up some yourself!
Thanks for stopping by
Nice purchase -- of course, as you know, I also bought more KMI recently. Great minds think alike!
ReplyDeleteHi DGM,
DeleteI noticed several bloggers had picked up some recently. I picked up shares for cheaper than I paid in March. There's not many stocks out there that are below my cost basis. Indeed, great minds do think alike!
Cheers!
Great purchase, and at a great price. I think KMI will provide great returns for years to come with some significant growth expected in the next couple of years.
ReplyDeletewriting2reality,
DeleteThanks, I tend to agree with you. I look forward to collecting their growing dividends.
Take care!
AAI,
ReplyDeleteKMI is awfully compelling here, and trading well below what I think it's worth. I have a large allocation to KMI already, and energy in general, so I'm a bit leery adding any more. Plus, the leverage is a bit high. However, the energy build-out in this country is going to be huge and I think we're on the cusp of a natural gas revolution. The potential is huge. I'll consider this one further.
Best regards!
Hi DM,
DeleteI'm also getting overweight in energy. It's ok temporarily while I build the rest of my portfolio though. However, a lot of sectors don't seem to offer the same attractiveness lately. I also agree with you on the natural gas boom, it will be interesting to see how it plays out.
Thanks for stopping by!
Here is the chart: http://goo.gl/UgOYFW
ReplyDeleteThat's a nice looking chart. I love seeing the dividends increase every quarter!
DeleteKinder Morgan is a holding company that holds, El Paso, KMP, and the older holding company Kinder Morgan Management LLC. (KMR). Below is the dividend chart for KMP.
ReplyDeleteKMR which receives the same distribution as KMP, is designed for those who wish to reinvest the dividend deferring taxes until sold. Of the four Kinder Morgan entities KMR has always had the greatest after tax yield.
This is the dividend chart for KMP which fuels KMIs dividend growth: http://goo.gl/moqrZW
That's an impressive chart of KMP. I obviously like KMP also since as you mention, KMI receives most of their distributions from them. I personally like KMI because Richard Kinder owns KMI, they have a higher projected dividend growth and dividends are taxed normally.
DeleteThanks for stopping by and sharing!
I see you did decide to buy KMI after all. Good job grabbing up some shares on the dip.
ReplyDeleteHi Captain,
DeleteI was due to add to KMI and I bought shares cheaper than my last purchase in March. It's getting harder to find attractively valued stocks in this market.
Thanks for stopping by!
I'm also long KMI and agree with the general sentiment above!
ReplyDeleteHey Wallet,
DeleteI'm glad you are on board with KMI. I think there's a lot more room for future growth. The prospects for this company look really bright. The yield and dividend growth are hard to beat.
Thanks for dropping by!