KMI has recently dropped and is sitting near their 52-week low of 32.82 reached on 12/05 after announcing lower guidance for next year. They announced that they expect to pay out 1.72/share which is still 10% higher than this year's payout. With a yield pushing 5% and good dividend growth, I think KMI presents a great value at current prices. At a 10% yearly increase, it would only take about 7 years to double your YOC. If you think their growth will be closer to 8% then it will take 9 years to double your YOC. Any time I can pick up a company that I believe will achieve a 10-year YOC of 10% or greater, I feel like I'm getting a bargain.
I actually purchased 85 shares recently back on 11/15. You can find that article here.
I purchased another 100 more shares at 33.43/share reducing my cost basis to $34.63/share on my now 300 shares.
These 100 shares should provide another $172 in dividend income next year.
With markets at all-time highs, it's becoming tougher and tougher to find values in this market. The energy sector is becoming a little overweight for me but I know it will average out in the long run. I believe you have to take advantage of any discounts you can get when they occur whether that means going a little overweight or not. This is especially true during the building phase of your portfolio.
With markets at all-time highs, it's becoming tougher and tougher to find values in this market. The energy sector is becoming a little overweight for me but I know it will average out in the long run. I believe you have to take advantage of any discounts you can get when they occur whether that means going a little overweight or not. This is especially true during the building phase of your portfolio.
Good work AAI. My limit order didn't quite get hit last week, and then the market exploded higher. It looks like a keeper, so I'll make another run at it.
ReplyDelete-Bryan
Hi Bryan,
DeleteWith the markets down today, you may have had your order filled. Either way, a dollar isn't going to make a lot of difference 10 years from now.
Thanks for stopping by!
out of curiosity, why KMI instead of KMP?
ReplyDeleteHi Dan,
DeleteMainly for two reasons:
First, KMI is the holding company and is taxed normally where KMP is an MLP so you get a K-1 form and different tax treatment. Also, KMI is projected to have the better long-term dividend growth even though their projections have come down a little next year.
There are some good articles on seeking alpha about the topic.
Cheers!
AAI,
ReplyDeleteI really like KMI here at these prices. I picked up about 40 more shares last week although I would have liked more. I'mt trying to keep weighting in mind, both individual companies and industry, but I'm willing to push the weights around as I'm building my portfolio and the opportunities don't all come at once.
Hey PIP,
DeleteI agree with you and don't mind going a little overweight because at some point another sector will be at a better value and I can worry about balancing the portfolio more when I get closer to FI. I think you have to take advantage of any discounts when you can get them.
Thanks for stopping by!