Stocks rose Monday amid a spate of earnings reports and mergers and acquisitions and news. Treasuries declined on ongoing speculation that the Federal Reserve is nearing its first interest rate hike of 2016.
The S&P 500 gained 0.47% while the Dow Jones Industrial Average advanced 0.43%. The Nasdaq Composite closed higher by 1%.
Kinder Morgan Inc (KMI)
Energy giant Kinder Morgan Inc rose 2.4% after an analyst covering the company said KMI’s dividend could more than double next year.
Darren Horowitz of Raymond James raised his rating on KMI to “strong buy” from “outperform” while boosting his price target on the stock to $27 from $23, implying significant upside from Monday’s close. The analyst believes KMI’s dividend could surge 130% next year.
“We believe KMI’s risk/reward profile is increasingly compelling. As such, we are upgrading our rating from Outperform to Strong Buy and changing our suitability rating from High Risk/Income to Medium Risk/Income,” said the analyst in a note posted by Barron’s.
Kinder Morgan cut its dividend, previously one of the primary reasons investors were drawn to the stock, when oil prices slumped to conserve cash. The company’s current annual payout is 50 cents a share, good for a yield of just under 2.4%.
T-Mobile US Inc (TMUS)
Shares of telecom giant T-Mobile US Inc jumped 9.5% on more than six times the average daily volume after the company said it added 969,000 new subscribers in the third quarter, thanks in part to the debut of the latest iPhone.
TMUS said it expects to add 3.7 million to 3.9 million new subscribers this year up from previous guidance of 3.4 million and 3.8 million.
There is also some speculation that TMUS could again be a takeover target as big cable companies look for entries into the wireless space.
B/E Aerospace Inc (BEAV)
Shares of B/E Aerospace Inc surged 16.3% on more than 20 times the average daily volume, reaching a new 52-week high along the way, following reports the company will be acquired by larger rival Rockwell Collins, Inc. (NYSE:COL).
Rockwell Collins is paying $6.4 billion for BEAV, a 22.5% premium to where BEAV shares closed last Friday. Rockwell Collins is paying $34.10 in cash and $27.90 in stock for each BEAV share.
The deal is expected to deliver $160 million in cost savings.
As of this writing, Todd Shriber was long KMI.