KMI announced yesterday a quarterly dividend increase of from $0.42 to $0.43 per share that’s payable August 15, 2014 to holders of record July 31, 2014. This represents a 5% increase to the cash distribution from the second quarter of 2013.
This marks two consecutive quarters of dividend increases after keeping them the same for a couple of quarters last year. This is the 52nd distribution increase since 1997!
KMI remains a full position in my portfolio and I’m currently holding with no plans to accumulate more unless there is a big correction.
Since I own 345.25 shares this will increase my yearly dividends by $13.81. I’ve had 25 stocks in my portfolio increase their dividend already this year.
Even better news, it looks like its actually going up from 0.42 to 0.43 per share 🙂
Hi Sean,
You’re correct. I wrote .42 by mistake and have since corrected it. The .01 increase was still correct though.
Thanks for stopping by!
Nice to hear about the dividend raise. Thanks for sharing. We also own KMI and will look forward to the increase. 🙂
Cheers to another 5%! AFFJ
A Frugal Family’s Journey recently posted…Stocks Added to Blog Collection (Update) – Mid-Month (July 2014)
AFFJ,
No problem, congrats on yet another raise!
Take care!
Personally I can’t get enough of KMI. I think it is well run, financials are good, and best of all huge internal holding by the CEO!
Wallet Engineer #1 recently posted…Intrafamily Mortgages Are Pretty Damn Sweet
Cheers,
could anyone please explain the Business Case of KMI to me? I’m from Germany and i like high yield stocks, but never understood the Bunch of all Kinder Companies… …MLP etc….
Is it all about your shale gas in the US or … where does their Money come from?
Kind Regards,
jogi
Hi Jogi,
In a nutshell they are paid as sort of a tollway for companies that just use their pipelines. They do have a sophisticated structure. KMI is the general partner and doesn’t required a k-1 form. Also the owner , Richard Kinder, is putting a lot of his money here. There’s some pretty good articles on seekingalpha if you just enter their ticker. Let me know if you have any other questions.
Thanks for stopping by!
Hi Mr. All About Interest,
thanks for your insights,
as you are member of DIV-Net i found your very interesting / informative page!
You are mentioning “seeking Alpha”, I do not know (as I’m from outside U.S.) how i shall handle them, they seem too me a little bit too “amateurish” and too stuck to their interests, whatever they are… ?!?!never subscribed, so my impression is only from their first pagers :-)?!?
coming back to KMI (from which i do own some -small- parts): is this a bet on expanding shale gas? where will their profit come from in 20 years?
where is the RISK, which is giving me now a small uber-profit compared to the market? – actually i broke the “Buffet Rule” – always understand the business of the company you are investing – to get this profit, but want to align with the rule and understand their Business…
I know KMI is a “housenumber” in Pipeline Business but i would like to learn the risky side of their Business and my Invest.
Kind Regards,
jogi
Hi Jogi,
I’m glad you found my page, Div-Net is a great community of like-minded investors. I was just suggesting SA as one resource. It’s free to join and there are some regular author’s that provide quality insight and analysis. However, my first recommendation would be to go to their website and read through the earnings call and annual/quarterly reports. There’s also a wealth of information about new projects. This is the first place I start when analyzing a company.
Absolutely their profits are tied to the shale gas boom. With new fracking technologies and discoveries, there is an abundance that needs to get transported. This isn’t going away any time soon in the next 10-20 years.
I won’t even begin to predict out 20 years, that’s why it’s important to monitor your companies each year. As you know, a higher yield typically means more risk.
KMI is mainly a bet on KMP. KMI receives what are called IDR’s (Incentive Distribution Rights) based on the cash flows of KMP. It’s also on a sliding scale so when KMP does well then KMI does disproportionally well and likewise when things are bad then KMI would do disproportionally bad. This is where some of the risk is. KMI also holds some debt. Since they pay out basically all of their after tax cash flow, this means they have to keep rolling over that debt. The only way I see to pay that down would be to reduce the dividend. I don’t think the debt is out of hand but this would be another risk.
For me, I’m willing to take on some risk here. I know natural gas usage is only increasing. I believe it will continue to do so with the abundance and cheap prices here.
I hope that helps!
Thanks for your explanations and your evaluations!
As a non-native Speaker, it’s !hard! work for me to understand the Business language on your English-Sites and it’s not easy to read all the pages/papers AND understand them properly.
Besides the risks for KMI you mentioned
– Debt leverage
– KMP cash-flow
– future uncertainty
i have to take the -additional- currency conversion risk,
– which is to my opinion “working for me” in a midterm timeframe, as i expect a stronger Dollar/EURO Exchange rate in near future as we are still struggling with the EURO-Crisis here –
The SA subscription is on the way, helps me to improve my English anyway.
Thanks,
Kind Regards,
jogi
No problem. I’m glad to be of help. Your English sounds pretty good for not being a native speaker.
Take care!