Acquisition KMI

Kinder Morgan Inc Company LogoIt sure has been a busy time of the year. My last purchase of the month is no other than Kinder Morgan Inc. (KMI). The stock has literally been taken a beating due to the extreme drop of oil prices. Nonetheless, it didn’t stop the company releasing news about a month ago on raising their current quarterly dividend by 16%. That solidified my reasoning for the purchase, while proving their ongoing shareholder loyalty. Who knows how long the oil prices will stay low, which is why I am not holding my breath. My reasoning is that it is only a matter of time when the oil prices will rebound back and so will companies like this.

Founded in 1997, Kinder Morgan Inc. is the leading transportation and energy storage company of our time. The company is also the largest energy infrastructure company in North America. Currently, it owns an interest in or operates about 84,000 miles of pipelines and 165 terminals. It works with the biggest oil companies, energy producers and shippers in the world. The pipelines serve as major highways for transporting natural gas, refined petroleum and crude oil to name a few. Additionally, the terminals provide storage services for products like gasoline, jet fuel, ethanol and coal.

  • Dividend Yield: 7.4%
  • 3 Year Dividend Growth Rate: 31.9%
  • Payout Ratio: 295.7%
  • P/E: 61.0
  • Consecutive Years of Dividend Raises: 5

These numbers are ridiculous! Especially the Payout and the P/E Ratios. It just shows that even KMI is not immune from severe oil crashes.

I purchased 39 shares of KMI for the price of $27.47 adding $79.56 to my annual dividend income.

This is the 13th time I am initiating a stock acquisition this year. This transaction is my additional purchase of KMI shares into the portfolio. As of today, I now hold 158 shares of KMI. I also managed to pick up 3 more free shares via DRIP. Currently, KMI ownership stake represents to be around 5.4% of my current portfolio value. I am full on this position, though due to lower prices of the company I will continue dripping until the price recovers.

The 12-month dividend income increased to $2,609.

Thank you for reading & have a great day!

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2 Comments

  1. Captain Dividend on November 23, 2015 at 20:56

    I wouldn’t be too thrown off by the payout ratio, it’s a bit misleading since the dividend is paid with DCF. Tempted to buy more here with that 8% yield looking sexy. The bears have really punished the stock. In year or two from now when oil and natural gas have rebounded you’ll look back and be glad you bought at these levels.

    • DividendVet on November 24, 2015 at 12:50

      Yeah, the payout ratio is a bit complicated to understand with KMI business segments. This is why I thought this is going to look really bad to the readers when I post this data on the company. But what the hell! 🙂

      Definitely, the dividend yield is looking very attractive at the current levels, though there are some possible risks that are associated with the connection of crude oil business. I think this is especially if it is for a prolonged periods of time. Either way, the company sounded quite confident on the future with 16% dividend raise, and they most likely know the business better than I do. Either way the investment strategy is a longterm approach and time will do the heavy lifting.

      Good hearing from you!

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