KMI (Update)
Kinder Morgan Inc
Energy
12/05/2016
Presented
| Date | 12/01/2016 |
| Price | $21.49 |
| Market Cap | $47.92B |
| Ent Value | $91.88B |
| P/E Ratio | N/A |
| Book Value | $15.52 |
| Div Yield | 0.02% |
| Shares O/S | 2,230.00M |
| Ave Daily Vol | 15,912,937 |
| Short Int | 1.25% |
Current
| Price | $24.76 |
| Market Cap | $55.04B |
| Kinder Morgan, Inc. operates as a holding company. It owns and operates pipelines and terminals that transport natural gas, gasoline, crude oil, carbon dioxide and other products and stores petroleum products, chemicals and handle bulk materials like ethanol, coal, petroleum coke and steel. It operates through the following segments: Natural Gas Pipelines, CO2, Terminals, Product Pipelines. Kinder Morgan Canada and Other. The Natural Gas Pipelines segment engages in the sale, transport, processing, treating, storage and gathering of natural gas. The CO2 segment produces and sells crude oil from fields in the Permian Basin of West Texas and the transportation and marketing of carbon dioxide used as a flooding medium for recovering crude oil from mature oil fields. The Terminals segment owns and operates liquids and bulk terminal facilities throughout the U.S. and portions of Canada that transload and store refined petroleum products, crude oil, condensate, and bulk products, including coal, petroleum coke, cement alumina, salt, and other bulk chemicals. The Products Pipelines segment handles the transportation of refined petroleum products, including gasoline, diesel fuel, jet fuel and natural gas liquids. The Kinder Morgan Canada segment transports crude oil and refined products from Alberta, Canada to marketing terminals and refineries in British Columbia, the state of Washington and the Rocky Mountains and Central regions of the U.S. The Other segment manages other miscellaneous assets and liabilities including the corporate headquarters; several physical natural gas contracts with power plants; and other legacy assets and liabilities. The company was founded by Richard D. Kinder and William V. Morgan on August 23, 2006 and is headquartered in Houston, TX. |
Please note, this is an update to Long - Kinder Morgan, which was presented on November 22, 2016.
Publicly traded companies mentioned herein: Kinder Morgan Inc (KMI), Spectra Energy Corp (SE), Williams Companies Inc (WMB)Highlights
The presenter is long shares of Kinder Morgan (KMI) and believes the largest energy infrastructure/ gas pipeline owner/operator in the US can a) delever more quickly than the market anticipates (i.e., to under 5x by the end of 2017); and b) reinstate its dividend in early 2018. He briefly reviewed the quality of KMI’s cash flow, reminding the group that just over 90% of total cash flow is fee-based, and of that roughly 75% is take-or-pay contracts. At $21-22 per share the stock is attractively valued, and if his $2.25 estimate of distributable cash flow (DCF) in 2018 proves to be accurate the dividend could be ~$1.75 (assuming 1.3x coverage). Capitalizing that payout at 6% equates to a $29-30 value for the stock (+30% upside in 12-18 months).
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