This Nearly 5%-Yielding Dividend Stock Has Plenty of Fuel to Continue Growing the Payout

Core Viewpoint - Kinder Morgan is highlighted as a strong investment option for those seeking sustainable and steadily increasing dividend income, supported by a high dividend yield of nearly 5% and stable earnings growth [1]. Financial Performance - In the third quarter, Kinder Morgan generated nearly $1.9 billion in adjusted EBITDA, reflecting a 2% increase year-over-year, while distributable cash flow remained flat at $0.49 per share, sufficient to cover a 2% higher dividend payment of $0.2875 per share [2]. - The natural gas pipeline segment saw a 7% increase in earnings year-over-year, driven by acquisitions and expansion projects, with overall natural gas transport volumes increasing by 2% and gathering volumes growing by 5% [2]. Segment Performance - The terminals segment experienced a 3% growth in earnings year-over-year due to expansion projects and higher rates, while the products pipelines and carbon dioxide segments faced declines of 12% and 7% respectively, impacted by lower commodity prices and asset sales [3]. - Kinder Morgan produced over $1.2 billion in cash flow from operations in the quarter, totaling over $4.2 billion year-to-date, which comfortably covered capital spending and dividend payments, leaving an excess of $353 million [4]. Growth Prospects - The company placed $484 million in expansion projects into service during the third quarter, with a backlog of $5.1 billion, including significant projects like the Gulf Coast Express Pipeline expansion and Gulf Coast Storage Expansion [5]. - CEO Kim Dang indicated ongoing discussions about new natural gas demand opportunities, suggesting the potential for annual investments of about $2 billion into high-return growth projects, which would further enhance cash flow and support dividend increases [6]. Investment Appeal - Kinder Morgan's solid third-quarter results, driven by its stable natural gas pipeline operations, and its ability to generate sufficient cash flow to cover dividends and fund expansion projects, position it as an attractive stock for investors seeking reliable dividend income [7].