I haven’t added to KMI since March of this year. The price has come down recently and I decided I had a good opportunity to add additional shares. I also noticed several other bloggers have picked up shares recently.
Kinder Morgan, Inc. (KMI) is the general partner of both El Paso Pipeline Partners (EPB) and Kinder Morgan Energy Partners (KMP). The CEO, Richard Kinder owns and continues to buy KMI. I like KMI because of the tax treatment and their plans to increase the dividend at a fast pace, likely 9-10% per year. Their 4th quarter payment of .41 is 13.9% higher than their 4th quarter payment of last year of .36. At 9% dividend growth and a starting dividend of 4.7%, KMI’s 10-year YOC would be 11.1% which is greater than the 10% I like to look for.
I purchased 85 shares @ $34.709/share this week.
Shares are currently yielding 4.7%. Their dividends have been increasing every quarter! They have paid out 0.37, 0.38, 0.40, 0.41 this year including the payment that goes through on 11/15.
I now have 200 shares of KMI that will produce at least $328 in dividends next year.
My portfolio weight in the Energy sector is now a little high at 16.7%. This is ok because I have a long ways to go in building my portfolio. I don’t mind going a little overweight while these energy companies have good valuations.
Kinder Morgan, Inc. (KMI) owns and manages a diversified portfolio of energy transportation and storage assets. The Company operates in five business segments: Products Pipelines-KPM, Natural Gas Pipelines-KMP, CO2-KMP, Terminals-KMP and Kinder Morgan Canada-KMP. The Company through Kinder Morgan Energy Partners, L.P. (KMP) operates or owns an interest in approximately 37,000 miles of pipelines and approximately 180 terminals. These pipelines transport natural gas, refined petroleum products, crude oil, carbon dioxide and other products, and its terminals store petroleum products and chemicals, and handle such products as ethanol, coal, petroleum coke and steel. The Company is a provider of carbon dioxide (CO2), for enhanced oil recovery projects in North America. On May 25, 2012, KMI acquired El Paso Corporation. In August 2012, Kinder Morgan Energy Partners, L.P. acquired Tennessee Gas Pipeline (TGP) and a 50% interest in El Paso Natural Gas (EPNG) pipeline from KMI.