Kinder Morgan’s Natural Gas/Dividend Growth Cycle Still in Play

Core Viewpoint - Kinder Morgan's natural gas-to-dividend cycle remains active, focusing on capacity investment supported by long-term contracts with high-quality clients, which enhances cash flow and dividends [2] Financial Performance - Kinder Morgan reported $4.51 billion in net revenue for FQ4, representing a 13% year-over-year increase, driven by natural gas demand and new project completions [5] - Adjusted net income and earnings per share increased by 22%, with expectations of continued strength in the upcoming fiscal year [6] Dividend Outlook - The company offers an attractive annual dividend yield of 4%, having increased its dividend for eight consecutive years, with a sustainable low single-digit distribution CAGR anticipated [3] - The payout ratio relative to free cash flow is approximately 70%, which is manageable given the company's strong balance sheet [4] Investment Cycle and Growth Prospects - Kinder Morgan's investment cycle is robust, with a growing project backlog that could accelerate growth by year-end [7] - Planned capital expenditures of $3.4 billion and recent credit upgrades from major ratings agencies, including an upgrade to BBB+ by S&P, reflect improvements in the balance sheet and cash flow outlook [8]