Kinder Morgan Energy Partners (KMP) — This master-limited partnership (MLP) is one of the largest pipeline operators in the U.S. It transports refined petroleum products and natural gas through over 75,000 miles of pipeline.
It currently pays a cash distribution of $5.52 a year for a 6.6% yield. S&P estimates the MLP will increase that payout to $5.61 per unit this year and $5.81 in 2015. It has a “four-star buy” rating on KMP with a 12-month target of $89 based on a 10x multiple of enterprise value to 2015 EBITDA.
Consensus estimates for earnings are $2.78 per share in 2014, up from $2.42 in 2013, and $2.89 in 2015.
A one-year downtrend was broken in early July when the stock rose through its bearish resistance line. On July 17, KMP flashed a golden cross as its 50-day moving average moved up and through its 200-day moving average. And MACD just issued a buy signal. The trading target is $90.