Saturday, March 29, 2014

Recent Buy; Kinder Morgan Inc. (KMI)

28th March 2014 I Bought 175 shares of KMI at $32.14 per share plus commission.

Kinder Morgan, Inc. operates as a midstream and energy company in North America. It operates through Natural Gas Pipelines, CO2—KMP, Products Pipelines KMP, Terminals KMP, Kinder Morgan Canada KMP, and Other segments. The company owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, carbon dioxide (CO2), and other products; and terminals store petroleum products and chemicals, and handle products, such as ethanol, coal, petroleum coke, and steel. The company was formerly known as Kinder Morgan Holdco LLC and changed its name to Kinder Morgan, Inc. in February 2011. Kinder Morgan, Inc. is headquartered in Houston, Texas.

On couple of past weeks KMI’s share price has been under pressure and it is now trading near 52 weeks low. I thought to use this possibility and I bought Kinder Morgan to my portfolio. I believe that in future Kinder Morgan is able to pay a growing dividend to its owners.

Here some lately positive things over KMI:

Insider buying:

  • This past month Kinder Morgan continued their trend of insider buying as two corporate executives made buys on Feb. 24. The two insiders added over 200,000 shares to their holdings as the share price sits at its 52-week low. Chairman and CEO Richard Kinder made the largest buy of the month adding 199,165 shares to his position. The CEO bought these shares at $32.09 per share for a total transaction amount of $6,391,205. Since his buy the price per share has dropped a slight -0.75%. Kinder now holds on to 243 million shares of his company's stock, making him the largest individual shareholder of the company. Vice President Dax Sanders added a much smaller 1,000 shares to his stake on Feb. 24. The insider bought these at $32.35 per share for a total transaction amount of $32,350. Since his buy the price per share is down about -1.55%. Sanders now holds on to at least 266,499 shares of the company's stock. (

Press release 14th March 2014:

  • Kinder Morgan Expects to Meet or Exceed 2014 Financial Expectations. As previously announced, KMI expects to declare dividends of $1.72 per share for 2014. This represents an 8 percent increase over its 2013 declared dividend of $1.60 per share. Growth at KMI in 2014 is expected to be driven by continued strong performance at KMP and contributions from EPB. (

KMI has now paid growing dividends three year a row. At this moment it pays quarterly dividends of $0.41 per share normally in February, May, August and November.

Kinder Morgan’s dividend history:

Some ratings for KMI:

    Yahoo:  Mean Recommendation 2.3, 1y Target Est $38.29
    Reuters Mean Rating 2.27
    Morningstar:  (***) Fair Value Estimate $34.00

My last purchase 175 shares of KMI increase €155.50 ($213.81) of expected annual dividend net income, which increases my portfolio projected annual dividend net income to €6957. 40. With purchase price $32.14 plus commission my starting yield on cost is 5.07%.

Full Disclosure: Long KMI

Click here to see my holdings.


  1. Good call, DH.
    KMI is so attractively priced right now. I should've waited instead of buying at the $36 level. I am still wondering if I should buy more but I my investment in the energy sector is already very high (>10%).

    Have a good weekend

  2. Great purchase here DH. As with R2R above, my cost basis is well above these levels, but can't commit to purchasing any more at this point. Tough given the projected growth for KMI over the next few years.

    1. Hi R2R and W2R

      It would be too simple, if you always knew what level it is the best time to buy. Possible that next week KMI will be under $30. Anyway in normal case, the price will be bouncing back in the long term. I should also avoid energy sector, weight now almost 15%, but it will go down, when I purchase stocks from some other sector.

      Nice weekend for you too!

  3. Nice buy Hawk. I almost bough some KMI around $31, but missed it. I don't think I'll repeat that mistake. Have a great weekend. If the broad market wasn't so elevated, I would let myself go overweight energy and beverage (KO/PEP) stocks......but instead I'm hesitant :o/ Have a great weekend

  4. Thoughts on the share price at current levels? Yield seems lucrative, but is the payout ratio unsustainable? With a basic DDM Valuation the share should easily trade above $50?

    Cool site tbh, hi from Finland!


  5. I deemed the payout unbearable and the company thought so as well only a couple weeks after i decided to not open a position. Common sense paid off in the end.