{"id":1378,"date":"2023-01-20T15:30:27","date_gmt":"2023-01-20T15:30:27","guid":{"rendered":"https:\/\/tradersontrend.com\/?p=1378"},"modified":"2023-01-20T15:30:27","modified_gmt":"2023-01-20T15:30:27","slug":"kinder-morgan-is-bullish-because-of-these-reasons","status":"publish","type":"post","link":"https:\/\/tradersontrend.com\/h\/2023\/01\/20\/kinder-morgan-is-bullish-because-of-these-reasons\/","title":{"rendered":"Kinder Morgan is Bullish Because of These Reasons"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1378\" class=\"elementor elementor-1378\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-149c99f elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"149c99f\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-10628ce3\" data-id=\"10628ce3\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-4aa19453 elementor-widget elementor-widget-text-editor\" data-id=\"4aa19453\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.21.0 - 26-05-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p>Despite recent turbulence in the energy industry, Kinder Morgan (<a href=\"https:\/\/www.google.com\/finance\/quote\/KMI:NYSE\">NYSE: KMI<\/a>) remains a buy.<br \/><br \/>While the prices of energy producers&#8217; products, especially natural gas producers, have fallen substantially from their post-pandemic highs, demand for natural gas remains high.<\/p><p>This position puts Kinder Morgan in command of cash flow and dividends, which is good news for income investors.<\/p><p>When compared to S&amp;P 500 firms, it is trading at 16X earnings. When compared to the metric that matters, distributable cash flow, that multiple falls to around 8X, and it pays a 6% dividend.<\/p><p>6% is more than three times the average S&amp;P 500 yield; it&#8217;s much over what the index could consider &#8220;high yield,&#8221; and it&#8217;s a steadily expanding distribution. What more could a passive income investor ask for?<\/p><p>Richard D. Kinder, Executive Chairman, stated,<\/p><p>&#8220;<em>Our company finished the year strong with another great quarter. We earned strong earnings and dividend coverage for the current quarter. Company shareholders continue to benefit from our capital-efficient business model, which achieves our time-tested goals of maintaining a strong investment-grade balance sheet, internally funding expansion opportunities, paying an attractive and growing dividend, and repurchasing our shares on an opportunistic basis.<\/em>&#8220;<br \/><br \/><strong><span style=\"font-size: 24.5px; font-family: inherit;\">Kinder Morgan Outperformed Earnings Expectations<br \/><br \/><\/span><\/strong><span style=\"font-family: inherit;\">Kinder Morgan published a <\/span><a style=\"font-family: inherit;\" href=\"https:\/\/ir.kindermorgan.com\/news\/news-details\/2023\/Kinder-Morgan-Reports-Fourth-Quarter-Earnings-Per-Share-up-7-and-Distributable-Cash-Flow-Per-Share-up-13-Versus-the-Fourth-Quarter-Of-2021\/default.aspx\">mixed fourth-quarter earnings report<\/a><span style=\"font-family: inherit;\">, but the essential news is usually in the details, not the headlines. <br \/><br \/>The company reported $4.58 billion in revenue, a 3.4% increase over the previous year, although it fell short of the average projection due to dropping natural gas prices.<\/span><\/p><p>The key thing here is that margins have expanded as a result of corporate efforts, the natural gas spread, and share repurchases. <br \/><br \/>The company&#8217;s net income climbed by 5.1%, distributable cash flow increased by 11.3%, and adjusted earnings increased by 16%, all of which outpaced top-line growth, and exceeded consensus projections.<\/p><p>This is fantastic news for profitability and positions the company for a double tailwind if natural gas prices continue to rise.<br \/><br \/><strong><span style=\"font-size: 24.5px; font-family: inherit;\">Kinder Morgan Earnings Guidance<br \/><br \/><\/span><\/strong><span style=\"font-family: inherit;\">Despite the top-line downturn in Q4, Kinder Morgan reiterated its profitability and distributable cash flow outlook. <br \/><br \/>The business expects to earn $1.12 per share in adjusted earnings, which is in line with the consensus numbers and to pay $1.13 in dividends.<\/span><\/p><p>The dividend rise projection is a 2% increase over the 2021 term, and these projections may be conservative. The business anticipates natural gas consumption to quadruple in &#8220;<em>the coming years,<\/em>&#8221; which will be a significant tailwind for sales, profits, and distributable cash flow.<br \/><br \/><strong><span style=\"font-size: 24.5px; font-family: inherit;\">Kinder Morgan Increases Returns on Capital<br \/><br \/><\/span><\/strong>Kinder Morgan is in the <a href=\"https:\/\/www3.epa.gov\/carbon-footprint-calculator\/tool\/definitions\/naturalgas-distribution.html#:~:text=Natural%20gas%20distribution%20means%20the,is%20operated%20as%20an%20independent\">natural gas distribution<\/a> business. <br \/><br \/>Nonetheless, its business returns capital to shareholders through dividends and share repurchases. <br \/><br \/>The company stock is yielding more than 6.0% at the time of the Q4 data release, and a distribution increase is expected.<\/p><p>At first glance, the payout ratio appears to be problematic, because it is close to 100%, but when compared to the DCF, it is reduced to around 50%. <br \/><br \/>In terms of share repurchases, the business increased its allotment by $1 billion to $3 billion, leaving slightly more than $2.0 billion to be spent in calendar 2023. This is worth around 5% of the market value and still boosts price activity.<br \/><br \/><strong><span style=\"font-size: 24.5px; font-family: inherit;\">The Technical Situation: Kinder Morgan Could Burst at Any Time<br \/><br \/><\/span><\/strong><span style=\"font-family: inherit;\">Despite exceeding pre-pandemic revenue, earnings, and dividend levels, Kinder Morgan shares are trading in a narrow range below those levels. In this light, KMI shares should be trading at or near $22, representing a near 25% gain for investors.<\/span><\/p><p>That aim is slightly higher than the analyst average, but the consensus estimate is trending higher and may rise again, now that the fourth-quarter numbers are in. <br \/><br \/>The market&#8217;s next big barrier is at $19.30; a move above there would be bullish. and might carry the stock to $21 or higher.<\/p><p><em>For More Stocks And Investment Related News, Click\u00a0<a href=\"https:\/\/tradersontrend.com\/\" target=\"_blank\" rel=\"noopener\" data-saferedirecturl=\"https:\/\/www.google.com\/url?q=https:\/\/tradersontrend.com\/&amp;source=gmail&amp;ust=1674295050976000&amp;usg=AOvVaw21X9ER42WwMSr68s0dNVo5\">Here<\/a>.<\/em><\/p><p>\u00a0<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Despite recent turbulence in the energy industry, Kinder Morgan (NYSE: KMI) remains a buy. While the prices of energy producers&#8217; products, especially natural gas producers, have fallen substantially from their post-pandemic highs, demand for natural gas remains high. This position puts Kinder Morgan in command of cash flow and dividends, which is good news for&#8230;<\/p>\n","protected":false},"author":1,"featured_media":1379,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[214,347,348,419],"class_list":["post-1378","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-newsletter","tag-energy-company","tag-kinder-morgan","tag-kmi","tag-natural-gas"],"_links":{"self":[{"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/posts\/1378","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/comments?post=1378"}],"version-history":[{"count":0,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/posts\/1378\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/media\/1379"}],"wp:attachment":[{"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/media?parent=1378"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/categories?post=1378"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tradersontrend.com\/h\/wp-json\/wp\/v2\/tags?post=1378"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}