KMP

Three Reasons Why Dividend Growth Investors Are Quite Savvy

by

A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more

Kinder Morgan Energy Partners’ 2014 Outlook Reveals Distribution Growth

by

On Tuesday, Kinder Morgan Energy Partners (KMP), one of the largest midstream (pipeline) energy companies in North America and a core Dividend Growth portfolio holding, announced expectations for 2014. Kinder Morgan Energy Partners expects to: Declare cash distributions of $5.58 per unit for 2014, an approximate 6 percent increase over its 2013 budget target of $5.28 per unit and an approximate 5 percent increase above its current expectation of $5.33. Generate approximately $6.4 billion in business segment earnings before DD&A (adding back KMP’s share of joint venture DD&A), an increase of approximately $750 million over the 2013 forecast. Distribute over $2.5 billion to its limited partners. Invest approximately $3.6 billion in expansions (including contributions to joint ventures) and small acquisitions. … Read more

Kinder Morgan Energy Partners Increases Quarterly Distribution

by

On Wednesday, Dividend Growth portfolio holding Kinder Morgan Energy Partners (KMP) increased its quarterly cash distribution per common unit to $1.35 ($5.40 annualized). The increase represents a 7% jump over the payout during last year’s quarter and a three penny bump from the second quarter of this year. We continue to be huge fans of the consistency of distribution increases at Kinder Morgan Energy Partners, where existing management has increased the distribution 49 times since early 1997. We expect to update our dividend report on the pipeline transportation master limited partnership shortly and continue to believe Kinder Morgan Energy Partners represents a core position in the portfolio of our Dividend Growth Newsletter. Though we note that the MLP is significantly … Read more

Air Quality Standards Take Aim at Coal

by

After competing with an abundance of lower-priced, cleaner natural gas, coal miners (KOL) may now have to deal with more demand headwinds as governments aim to reduce coal burning. The US Expectations are already for as much as 27 gigawatts’ worth of coal generation (about 8.5% of the US coal fleet) to retire by 2016. This percentage could rise to nearly 17% (one-sixth) by 2020, according to the Energy Information Administration. In addition to the expected retirements, the Environmental Protection Agency (EPA) plans to block all new coal-fired plants unless the construction of these plants coincides with expensive technology that captures greenhouse gas emissions. Image Source: Energy Information Administration Though the EPA forecasts that no traditional coal-fired power plants (1) … Read more

Headline Risk Entering the Market

by

The summer months have been relatively uneventful, with the exception of concerns relating to the Federal Reserve’s coming tapering of its bond-buying program and quibbles between hedge fund giants over a company that makes protein shakes—we’re talking about Herbalife (HLF) in the latter example. Even the sequester proved to be a largely underwhelming event so far through 2013. As a result, the market has focused on fundamentals, awarding strong performance and punishing poor performance (almost irrespective of valuation parameters). However, the market remains fully valued at current levels, with the forward price-to-earnings ratio on S&P 500 companies in-line with its 10-year average at 14.1 times, and the distribution of our Valuentum Buying Index ratings tilting decidedly negative. The forward price-to-earnings … Read more

Energy Transfer Partners’ Distribution Growth Could Return

by

Wednesday afternoon, Dividend Growth Newsletter portfolio holding Energy Transfer Partners (click ticker for report: ) announced solid second quarter results marked by nice growth in distributable cash flow (DCF). Because of its many acquisitions, revenue was significantly higher than the prior-year period at $11.6 billion, in-line with consensus expectations. Earnings per share were also significantly higher year-over-year at $0.53, which is also far better than consensus estimates. Ultimately, for a yield instrument like Energy Transfer Partners, cash flow metrics are far more important than headline numbers. After the Linn Energy (click ticker for report: ) distributable cash flow debacle, ETP has improved its distributable cash flow reporting, providing investors with DCF attributable to the partners of ETP. This excludes DCF … Read more

Firms Raising Their Dividend In the Week Ending July 19 Included Kinder Morgan and Omega Healthcare

by

Below we provide a list of firms that increased/decreased their dividends for the week ending July 19. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Increases Amphenol (APH): now $0.20 per share quarterly dividend, was $0.105. Bassett Furniture (BSET): now $0.06 per share quarterly dividend, was $0.05. CARBO Ceramics (CRR): now $0.30 per share quarterly dividend, was $0.27. Education Realty (EDR): now $0.11 per share quarterly dividend, was $0.10. El Paso Pipeline Partners (EPB): now 0.63 per share quarterly distribution, was $0.62. First Community Corporation (FCCO): now $0.06 per share quarterly dividend, was $0.05. Home Loan Servicing Solutions (HLSS) declares quarterly dividend of $0.15 per … Read more

Linn Energy: SEC Sees Smoke…Is There Fire?

by

Controversial independent oil and gas company Linn Energy (click ticker for report: ) announced Tuesday morning that the SEC has launched an informal inquiry into Linn and LinnCo (LNCO). As we previously outlined June 3, we have no interest in adding the company to the portfolio of our Dividend Growth Newsletter given the cloud of questions, poor internally-generated cash flow, and numerous downside risks. We’re retaining the firm on the watch list of our Dividend Growth Newsletter, however, as we continue to monitor developments closely. As always, our best dividend growth ideas are included in our Dividend Growth portfolio. We give credit to Linn’s management team for revealing the explicit details of the inquiry, stating in the press release: “The SEC … Read more

Firms Raising Their Dividends In The Week Ending April 19

by

Quite a few firms raised their dividends during the week ending April 19. Firms Raising Their Dividends This Week: Allison Transmission Holdings (ALSN): now $0.12 per share quarterly dividend, was $0.06. A.O. Smith (AOS): now $0.24 per share quarterly dividend, was $0.20. Cardinal Financial (CFNL): now $0.06 per share quarterly dividend, was $0.05. CSX (CSX): now $0.15 per share quarterly dividend, was $0.14. Discover Financial Services (DFS): now $0.20 per share quarterly dividend, was $0.14. Donegal Group (DGICA): now $0.1275 per share quarterly dividend, was $0.1225. El Paso Pipeline Partners (EPB): now $0.62 per share quarterly dividend, was $0.61. First Republic Bank (FRC): now $0.12 per share quarterly dividend, was $0.10. Kinder Morgan (KMI): now $0.38 per share quarterly dividend, … Read more

Kinder Morgan Grows Capacity; Raises Distribution

by

Pipeline master limited partnership Kinder Morgan (click ticker for report: ) reported strong fourth-quarter results Wednesday afternoon. Revenue surged 31% year-over-year to $2.5 billion, exceeding consensus estimates. Operating earnings per share grew 74% year-over-year to $0.61, also ahead of expectations. Distributable cash flow per share increased 6% year-over-year, to $1.35, more than covering the firm’s payout during the fourth quarter. This led the company to raise its fourth quarter distribution to $1.29 per share (payable February 14, 2013), three cents higher than the previous payout. The firm’s full-year distributable cash flow of $5.07 per share was significantly higher than in 2011, but more importantly, it easily covered distribution payments of $4.98 per share. Aside from solid earnings, we think the company’s … Read more