Image Source: TradingView
By Brian Nelson, CFA
On January 21, Kinder Morgan (KMI) reported better than expected fourth quarter results. Fourth quarter net income attributable to KMI came in at $996 million versus $667 million in the fourth quarter of 2024. Adjusted net income was 22% higher than the same period a year ago. Adjusted EBITDA was up 10%, to $2.27 billion, while earnings per share of $0.45 was up 50% versus the fourth quarter of 2024. Adjusted earnings per share was $0.39, up 22% versus the same period a year ago.
Management had the following to say about the results:
Led by record-setting performance in our Natural Gas Pipelines business segment, the company delivered its highest ever fourth quarter and full-year net income attributable to KMI and Adjusted EBITDA. For the full year, net income attributable to KMI was 17% higher than 2024 while Adjusted EPS and Adjusted EBITDA were 13% and 6% higher than 2024, respectively.
In the fourth quarter, we continued to internally fund high-quality capital projects while generating cash flow from operations of $1.7 billion and free cash flow (FCF) after capital expenditures of $0.9 billion, up 12% and 18%, respectively, from the prior year period. Our balance sheet remains healthy, as we ended the quarter with a Net Debt-to-Adjusted EBITDA ratio of 3.8 times.
Overall, total demand for natural gas is expected to grow by 17% through 2030, led by LNG exports. We have long-term contracts to move 8 billion cubic feet per day (Bcf/d) of natural gas feedstocks to LNG facilities, which is projected to grow to 12 Bcf/d by the end of 2028. We are also actively exploring more than 10 Bcf/d of opportunities to serve the natural gas power generation sector.
Looking to 2026, Kinder Morgan has budgeted net income of $3.1 billion, flat versus the prior year. Adjusted net income attributable to Kinder Morgan is targeted to be 5% higher than 2025, while targeted adjusted earnings per share of $1.36 are also up 5% from last year. The pipeline giant expects to declare dividends of $1.19 per share for 2026, a 2% increase from dividends declared in 2025. Management expects 2026 adjusted EBITDA of $8.6 billion, up 2.5% versus 2025, and to end this year with a net-debt-to-adjusted EBITDA ratio of 3.8 times. Kinder Morgan is not included in any newsletter portfolio. Shares yield 4.1% at the time of this writing.
—–
Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free.