KMI

Kinder Morgan: A Dividend Growth Investor’s Dream

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Rich Kinder and I see eye to eye quite often. The riskiness of the master limited partnership (MLP) structure is not something to scoff at, especially in the face of declining crude oil prices. Kinder Morgan (KMI) will finalize the roll-up of its MLP subsidiaries come end of year, and we think holders of Kinder Morgan will literally reap dividends on the move. Yesterday brought news that the firm expects to declare dividends of $2 per share in 2015 and post $500 million of excess dividend coverage. The concept of excess dividend coverage is nothing new at Valuentum, as the Dividend Cushion focuses intensively on this very idea. The increase would represent a 16% move over the 2014 budget of $1.72 per share … Read more

Valuentum Update – Post-Thanksgiving

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Hi members, We hope you had a long and happy holiday weekend with your families! I wanted to touch base today for a variety of reasons. I received a few emails over the holiday weekend regarding a couple of the newsletter portfolio holdings that are trading down with the markets.  Nothing out of the ordinary, but for those who are new to the stock market, this may be a bit startling and confusing. If you didn’t know already, we target the best ideas to converge to intrinsic value over a 12-24 month period, and sometimes longer, if market conditions do not cooperate. First, you should be aware of the collapse in crude oil prices (1). As it relates to the … Read more

$45 Oil Prices!?!? There Is Never a Sense of Urgency When One Is Prepared

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Image Source: Macrotrends The bull market in energy (XLE) has lasted for the better part of a decade. Ever since the turn of the new century, energy perma-bulls have made the case that “black gold” (USO) should continue its ever-upward price advance thanks to ongoing demand from emerging and developing economies coupled with reduced inventories and areas of supply. We’re seeing this thesis challenged right at this moment. In deciding not to cut crude oil output in the face of oversupply and falling prices, the Organization of the Petroleum Exporting Countries (OPEC), for the lack of a better phrase, is now essentially engaged in a price war with producers in the US that are using breakthrough technology to produce oil … Read more

Third Quarter Earnings Season Pushes Forward

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The equity markets continue to propel higher despite what we would describe to be a mixed third-quarter earnings season. Let’s walk through a number of earnings reports from popular companies reporting so far this week. Some of them we include in the newsletter portfolios. Others we don’t. But all are worth keeping tabs on. Annaly (NLY) Annaly is a mortgage REIT (mREIT) with principal business objective to generate net income for distribution to shareholders. Being critical of the mREIT business is certainly unpopular, and we understand that many retirees generate vital income streams from such investments. Bulls and bears, however, both benefit from our independent voice, and we call out risks as we see them. Annaly and American Capital Agency … Read more

We’re At New Highs Again

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The taper came and went, and the markets don’t seem to care. The S&P 500 notched yet another high this week. The correction that we warned about came and went as well, almost as if market forces created such an event just to move higher. From my experience, the market, at the present moment, is trading almost purely on technicals. For example, once we touched the 10% official mark of a correction, we started to move higher, and once the markets started to move higher, the move accelerated. Consecutive gap ups following pull-backs have become the norm. This market has become almost a pure technical market, where traders and moving averages are taking precedent over fundamentals. This won’t last forever. The … Read more

Kinder Morgan Reports Third Quarter Results

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Kinder Morgan (KMI) has moved to the top of our watch list after it made the decision to bring in-house Kinder Morgan Energy Partners (KMP), Kinder Morgan Management (KMR), and El Paso Pipeline Partners (EPB), thereby reducing its business structure risk as a holder of master limited partnerships (MLP), which remain heavily dependent on access to external new capital (something we’re not fond of). Holding an MLP in the newsletter portfolios is not a risk we take lightly. On Wednesday, Kinder Morgan (KMI) reported that cash available to pay dividends advanced 2.6% in the third quarter, to $435 million. The solid performance facilitated a dividend increase to $0.44/share on a quarterly basis, a 2.3% jump from previous levels and a … Read more