This 6.7% Yielder Is Flashing a Strong Buy Signal

KMP has strong support and is challenging its 50-day moving average

By Sam Collins, InvestorPlace Chief Technical Analyst

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, up from 38,000 miles just two years ago.

Analysts’ consensus earnings estimate for 2013 is $2.43, and they expect $2.72 in 2014. The stock has a dividend yield of 6.7%. S&P estimates that KMP will pay a cash distribution of $5.58 per unit in 2014. Its analyst have a “five-star strong buy” rating on the stock with a 12-month target of $99 based on its commitment to natural gas. S&P says this “differentiates it from other mid-stream companies that have primarily invested in the liquids play.”

Since its high just below $93 in April, the stock has been in a downtrend. However, there is strong support on a 5-point bottom at just under $78. The stock is now challenging its 50-day moving average at $81 and bearish resistance line at $82. MACD is flashing a strong buy signal. Buy KMP for participation in the growth of the natural gas industry and for appreciation and yield.

As a publicly traded partnership (PTP), KMP is expected to continue to receive favorable tax treatment. See the NAPTP website for information on PTPs, the current thinking on their tax treatment, and answers to questions you might have about them.

KMP Chart
Click to Enlarge

Chart Key

Article printed from InvestorPlace Media,

©2018 InvestorPlace Media, LLC