Kinder Morgan Inc (KMI) — Following the massive consolidation and reincorporation of its three master-limited partnerships (MLPs), Kinder Morgan became the largest energy infrastructure company in North America.
While the company no longer maintains its MLP structure, shareholders still enjoy a steady income stream. On Wednesday, management announced it was increasing its quarterly cash dividend to $0.45 from $0.44 in Q3 2014. At current prices, KMI stock yields 4.3%, but investors can expect that dividend to increase. The company said it plans to declare dividends of $2 per share for 2015 and increase its payout by 10% a year through 2020.
Despite the 50% decline in crude oil prices, Kinder Morgan’s earnings were only mildly impacted.
Credit Suisse Group AG (ADR) (CS) considers KMI stock a “core mid-stream holding” and recently raised its price target to $50 from $49 while maintaining its “outperform” rating following the company’s Q4 results.
Kinder Morgan acquired Hiland Partners, which has 1.8 million acres in the Bakken shale with a breakeven in the $40 WTI range.
Following a low just below $31 in March, KMI stock rose to a high above $43 in December. This 40% move occurred despite the massive drop in oil prices.
KMI stock has roughly tracked its 50-day moving average, but shares have also been highly volatile with swings of more than 15% common.
With a break from the resistance line at $42, KMI stock appears capable of a run to my trading objective of $50 within three months, which would result in an 18% gain from current prices. While traders may benefit from a relatively quick move, investors should buy KMI stock for both appreciation and income.
