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Yahoo
23-04-2025
- Business
- Yahoo
This 4.5%-Yielding Dividend Stock Could Get Another Big Boost from This $7 Trillion Investment Megatrend
Natural gas pipeline giant Kinder Morgan (NYSE: KMI) has long held an optimistic view on the future of natural gas demand. The company believes that liquified natural gas (LNG) exports will drive significant demand growth in the coming years. On top of that, artificial intellgence data centers could become a significant incremental demand driver. While recent developments have caused concerns about whether those demand forecasts are too optimistic (i.e., Deepseek and tariffs), Kinder Morgan is still very bullish on natural gas. That's because new demand drivers continue to emerge. The latest is that the Trump administration has unveiled nearly $7 trillion in new investments since taking over this year, which could drive additional gas demand if they come to fruition. These catalysts drive the company's view that it has lots of growth ahead, which bodes well for its ability to continue increasing its 4.5%-yielding dividend. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » One of the key goals of the Trump administration is to turn the U.S. into an economic powerhouse. The president wants to increase investment in the country by breaking down trade barriers, through tariffs and other means, and reducing regulation. The administration's policy changes have already attracted a flood of new investment pledges. Earlier this month, the president told reporters: We have, I would say, more than $7 trillion now... of investments coming in. Apple is coming in for $500 billion alone. We have other companies coming in with massive numbers. The tech giant, for example, expects to invest that money over the next four years into expanding its facilities across several states, building a new facility in Texas, and other investments, like data centers. Another notable investment includes the project Stargate, a massive $500 billion AI data center development by Softbank, OpenAI, and Oracle. Meanwhile, semiconductor companies Taiwan Semiconductor and Nvidia have committed to investing $100 billion and $200 billion, respectively. In addition, several countries have committed to investing significant amounts of capital into the U.S., including $1.4 trillion from the UAE, $1 trillion from Japan, and $600 billion from Saudi Arabia. Many of those investments will see companies build physical data centers or manufacturing complexes. These facilities will need energy, which is something the U.S. has in abundance, thanks to its treasure trove of low-cost natural gas resources. Kinder Morgan believes these investments would only add to the already significant growth expected for U.S. natural gas demand. CEO Kim Dang stated on the company's first-quarter conference call that "even if a portion of the roughly $7 trillion in new U.S. investment the administration has announced occurs, we believe that would drive demand that is not currently captured in the projection." Those projects would probably give the company even more opportunities to invest in expanding its natural gas infrastructure. It already has $8.8 billion of projects in its backlog, 91% of which will support natural gas. That's $900 million more than at the end of last year, as it recently added several new projects to its backlog. The biggest new addition is a $430 million extension of its Elba Express pipeline. That project will deliver about 325 million cubic feet of natural gas per day (Bcf/d) to South Carolina when it enters commercial service in 2030. The company could expand that capacity to 1 billion cubic feet per day in the future, depending on demand. Kinder Morgan now has visible earnings growth through the early part of the next decade. The company expects its backlog to continue growing as utilities and other gas consumers have more visibility into their future gas requirements. In Kinder Morgan's earnings press release, Dang stated, "In the natural gas power generation sector, we are actively pursuing well over 5 Bcf/d of opportunities to serve that market." She noted that the company is in a strong strategic position to capture a meaningful share of this demand due to its 66,000-mile pipeline network and 700 billion cubic feet of storage capacity. Kinder Morgan believes natural gas demand will continue growing at a solid clip for many years to come, fueled by catalysts like LNG and AI data centers. Meanwhile, with an estimated $7 trillion of investment pledges pouring in since the new administration took over in January, gas demand could grow even faster in the future. That bodes well for Kinder Morgan because it should provide the company with even more opportunities to expand its extensive gas infrastructure, giving it more fuel to continue growing its high-yielding dividend. That income and growth combo makes it look like a great stock to buy and hold for the long term. Before you buy stock in Kinder Morgan, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Kinder Morgan wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $532,771!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $593,970!* Now, it's worth noting Stock Advisor's total average return is 781% — a market-crushing outperformance compared to 149% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 21, 2025 Matt DiLallo has positions in Apple, Kinder Morgan, and Taiwan Semiconductor Manufacturing and has the following options: short May 2025 $275 calls on Apple. The Motley Fool has positions in and recommends Apple, Kinder Morgan, Nvidia, Oracle, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. This 4.5%-Yielding Dividend Stock Could Get Another Big Boost from This $7 Trillion Investment Megatrend was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
19-04-2025
- Business
- Yahoo
This 4%-Yielding Dividend Stock Continues to Provide a Safe Haven From Market Storms
There's a lot of uncertainty these days. Tariffs could cause a severe economic downturn, depending on who you listen to. That would have a significant impact on corporate profits. This potential impact is why stock prices have been so volatile this year. However, while the market is in turmoil, Kinder Morgan (NYSE: KMI) continues sailing along rather smoothly. That's a tribute to the natural gas pipeline giant's very stable business model. Its resiliency during turbulent times and high-yielding dividend make it a safe haven during market storms. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » "Obviously, we are going through turbulent times, with some voicing fears of an economic downturn," stated Richard Kinder, Kinder Morgan's co-founder and executive chairman, in the company's recent first-quarter earnings report. However, he continued: History shows that our company is largely insulated against temporary volatility, due to our time-tested business model structured around long-term take-or-pay, fee-based contracts with credit-worthy customers. As has been the case in past periods of economic instability, our company can be a safe haven during the storm. The company demonstrated its safe-haven characteristics during the first quarter, as its results were about as stable as they get. The pipeline company reported nearly $2.2 billion of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), up about 1% from the first quarter of last year. CEO Kim Dang commented, "The company enjoyed a solid quarter, with very strong operational performance and increased financial contributions from our natural gas pipelines, carbon dioxide, and terminals business segments versus the first quarter of 2024." She noted that the only segment that produced lower results was its products pipelines business segment. However, that was entirely due to maintenance at a facility that it must complete once every 10 years. Kinder Morgan produced nearly $1.2 billion in cash flow from operations during the quarter. That was more than enough money to cover its dividend payment ($642 million). The company used its post-dividend excess free cash flow and strong balance sheet to help fund expansion projects ($766 million of capital spending in the period). The midstream giant also closed its $640 million acquisition of a natural gas gathering and processing system in the Bakken Formation of North Dakota. The company's strong cash flow, low payout ratio, and visible growth profile gave it the confidence to increase its dividend by about 2% for the first quarter. That's the eighth straight year that Kinder Morgan has increased its dividend. While there's a lot of turbulence in the market right now, Kinder Morgan's future looks bright. Demand for natural gas is growing stronger. The U.S. set a record for production volumes and demand in the first quarter. Meanwhile, the company expects that demand will continue surging in the coming years, fueled by liquefied natural gas (LNG) exports and growing power demand to support the onshoring of manufacturing, artificial intelligence (AI) data centers, and other drivers. The company's growing backlog of expansion projects reflects this strong growth outlook. Kinder Morgan ended the first quarter with $8.8 billion of projects in its backlog. That's a nearly 8% increase from the end of last year. Meanwhile, that's several billion dollars higher than it had been in previous years. The company added about $900 million of new projects to its backlog in the quarter, led by the $431 million 71-mile Bridge pipeline project. It will provide 325 million cubic feet of natural gas transportation capacity to help meet growing demand in the state of South Carolina when it comes online in the second quarter of 2030. That project further enhances and extends the company's growth outlook, giving it visibility into the next decade. The company's commercially secured expansion projects will provide it with incremental sources of stable cash flow as they enter service over the next five years. That will give the company more fuel to increase its high-yielding dividend. Kinder Morgan can be a stabilizing force for any portfolio. The natural gas pipeline giant generates very stable cash flow, backed by long-term, fee-based contracts. Meanwhile, with a growing backlog of commercially secured expansion projects, the company should grow steadily even if we enter a period of economic turbulence. Those features make it a great safe-haven investment to take refuge in during uncertain times. Before you buy stock in Kinder Morgan, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Kinder Morgan wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $518,599!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $640,429!* Now, it's worth noting Stock Advisor's total average return is 791% — a market-crushing outperformance compared to 152% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 14, 2025 Matt DiLallo has positions in Kinder Morgan. The Motley Fool has positions in and recommends Kinder Morgan. The Motley Fool has a disclosure policy. This 4%-Yielding Dividend Stock Continues to Provide a Safe Haven From Market Storms was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
16-04-2025
- Business
- Yahoo
Pipeline operator Kinder Morgan misses first-quarter profit estimates
(Reuters) - U.S. pipeline and terminal operator Kinder Morgan narrowly missed Wall Street expectations for first-quarter profit on Wednesday, hurt by weakness in its products pipelines segment and higher costs. The results come as the energy industry braces for the impact of U.S. President Donald Trump's tariffs on most Canadian and Mexican imports, including levies on steel imports, "reciprocal" tariffs on other nations, as well as falling crude prices. However, Kinder Morgan left its annual profit forecast unchanged and said it does not expect tariffs to have a significant impact on project economics. "We began efforts to mitigate the potential impact early in the quarter by preordering critical project components, negotiating caps on cost increases, and securing domestic steel and mill capacity for our larger projects, which total two-thirds of our project backlog," said CEO Kim Dang. For the quarter ended March 31, Kinder Morgan posted a net income of $717 million, compared to $746 million during the same period last year. The Houston, Texas-based firm posted an adjusted profit of 34 cents per share for the three months ended March 31, compared with analysts' estimate of 35 cents per share, according to data compiled by LSEG.
Yahoo
05-03-2025
- Business
- Yahoo
These High-Yield Dividend Stocks Are Stomping on the Gas and Revving Up Their Growth Engines
Higher-yielding dividend stocks tend to be slower-growing companies. They often pay out a significant percentage of their cash flow in dividends because they don't have enough attractive growth opportunities to reinvest that cash. Their slower growth also weighs on their valuations, which causes their dividend yields to rise. Pipeline companies have fit that description in recent years as their growth has slowed. However, the industry is seeing a resurgence in demand. Because of that, several pipeline stocks are stomping on the gas by ramping up their investment rates, which should fuel faster growth in the coming years. And that re-acceleration could enable them to grow their high-yielding dividends even faster in the future. Natural gas pipeline giant Kinder Morgan (NYSE: KMI) has been running on fumes in recent years. The company's growth engine had stalled out, causing its dividend yield to rise. At recent prices, it yielded about 4.2%, which was several times higher than the S&P 500's 1.3% yield. However, several catalysts -- including the onshoring of manufacturing, the world's growing reliance on electrical energy, and the boom in data centers -- are fueling a resurgence in power demand. That's driving a surge in demand for more natural gas pipeline capacity. Kinder Morgan has recently added $5 billion of new large-scale natural gas pipeline projects that it expects to complete through the end of the decade. As a result, its backlog has ballooned to $8.1 billion, a 60% increase over the past quarter. Its backlog is several times higher than a few years ago ($3 billion at the end of 2023 and $1.4 billion at the end of 2021). The company believes those investments will drive earnings growth for years to come. That should give it more fuel to grow its dividend, which it has been increasing at a rather modest 2% annual rate in recent years. Dividend growth could start accelerating in 2027 when the first of its three major gas pipeline projects enters commercial service. Those projects are only the beginning. "As we look to the future, we continue to see additional growth opportunities in natural gas between LNG exports to Mexico power and industrial growth," CEO Kim Dang said on the company's fourth-quarter earnings call. Dang added, "Our internal number for growth in the overall natural gas business is roughly 28 Bcf [billion cubic feet] a day of growth between now and 2030." That's a significant amount of incremental demand, considering that U.S. gas consumption was 110 billion cubic feet per day last year. Fellow natural gas pipeline operator Williams (NYSE: WMB) also offers a higher dividend yield (recently 3.5%). It has been growing its payout a little bit faster than Kinder Morgan (about 5% annually over the past five years) thanks to the growth of its Transco pipeline. Williams is also seeing an acceleration in gas demand, which is allowing it to approve more expansion projects. The company recently announced an agreement to provide onsite natural gas and power generation infrastructure for an unnamed customer. It will invest $1.6 billion into the project, which should start service in the second half of next year. It's Williams' first power innovation project to supply natural gas-fired power directly to a customer. This project will cause Williams to boost its 2025 growth capital project budget by $925 million to a range of $2.6 billion to $2.9 billion. That's up from $1.5 billion last year. The company currently has projects in the backlog that should enter service through the end of the decade. Meanwhile, it has another 30 potential projects under development, representing $11.8 billion of investment potential through 2032. Securing those and other projects would give Williams even more fuel to continue increasing its high yielding dividend. Natural gas demand is in the midst of a resurgence. That's fueling accelerating growth for gas pipeline companies like Kinder Morgan and Williams. Because of that, they should be able to grow their higher-yielding dividends even faster in the future, setting investors up to potentially earn some high-octane total returns. Before you buy stock in Kinder Morgan, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Kinder Morgan wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $699,020!* Now, it's worth noting Stock Advisor's total average return is 863% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 3, 2025 Matt DiLallo has positions in Kinder Morgan. The Motley Fool has positions in and recommends Kinder Morgan. The Motley Fool has a disclosure policy. These High-Yield Dividend Stocks Are Stomping on the Gas and Revving Up Their Growth Engines was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
30-01-2025
- Business
- Yahoo
Kinder Morgan Announces the Advancement of $1.7B Gas Pipeline in Texas
Kinder Morgan KMI, a Houston-based midstream energy company, has announced that it will move forward with its $1.7 billion Trident Intrastate Pipeline project in Katy, TX. Once completed, this ambitious 216-mile pipeline will transport 1.5 billion cubic feet of natural gas per day to Port Arthur. The project is scheduled to go live by the first quarter of 2027, contingent upon securing the necessary permits and approvals. CEO Kim Dang highlighted that the pipeline's development is strongly connected to the increasing energy needs of Texas's growing AI data center sector, which has been a significant driver for the project. Kinder Morgan has already secured long-term contracts for the pipeline and two other major natural gas projects — South System Expansion 4 and Mississippi Crossing — with a combined projected cost of around $5 billion. In its commitment to responsible development, Kinder Morgan highlighted that the Trident Intrastate Pipeline project is backed by long-term contracts. Additionally, the company is working closely with impacted landowners to address concerns regarding the pipeline's route and construction. The Trident project is part of a broader trend in Texas, where several energy infrastructure developments are being announced. Last month, Energy Transfer approved the final investment decision for the Hugh Brinson Pipeline, which will deliver 2.2 billion cubic feet per day of natural gas to the Dallas-Fort Worth area. Similarly, WhiteWater Midstream revealed plans for a 2.5 billion cubic feet per day pipeline linking the Permian Basin to a gas hub near Corpus Christi. These projects reflect the increasing demand for natural gas in Texas and the ongoing efforts to expand the state's energy infrastructure. As Kinder Morgan advances with the Trident pipeline, the company is positioning itself to meet the future energy needs of both industrial growth and the digital economy, reinforcing Texas' role as a critical player in the U.S. energy landscape. Kinder Morgan currently carries a Zacks Rank #2 (Buy). Investors interested in the energy sector may look at some other top-ranked stocks like SM Energy Company SM, Sunoco LP SUN and Range Resources Corporation RRC. While SM Energy and Sunoco presently sport a Zacks Rank #1 (Strong Buy) each, Range Resources carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here. SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company's attractive oil and gas investments should create long-term value for shareholders. Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. Sunoco is poised to benefit from the strategic acquisitions aimed at diversifying its business portfolio. Range Resources is among the top 10 natural gas producers in the United States. Its diversified portfolio is spread between low-risk and long reserve-life Appalachian assets. The company's extensive inventory of Marcellus resources with low breakeven points is a significant asset. With expanded LPG export capacity, RRC is well-positioned to meet the rising global demand, capitalizing on natural gas's role as a clean-burning fuel amid a low-carbon shift. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Range Resources Corporation (RRC) : Free Stock Analysis Report Sunoco LP (SUN) : Free Stock Analysis Report SM Energy Company (SM) : Free Stock Analysis Report Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report To read this article on click here. Zacks Investment Research
