Kinder Morgan (KMI) is in a class of its own among midstream energy firms. But despite being one of the largest firms dedicated to moving crude oil, natural gas and other energy commodities, KMI stock has been taken to the woodshed this past year, down over 20% in the last 12 months. And yet, despite the declines to Kinder Morgan stock, KMI has managed to increase its cash flows and dividends, and expand its portfolio of midstream assets.
So what gives? Is KMI stock misunderstood, or is there something sinister going on? It appears like the former. For investors, this is a case of the market throwing out the bath with the bath water. Kinder Morgan could be one of the biggest values in the midstream sector, and the time to buy KMI stock is now. Given its strong history of rising cash flows and growth, KMI stock’s recent sell-off makes it a compelling buy for investors. Shares can currently be had for price-to-DCF metric- which is better way to gauge midstream and MLP shares- of 16. That makes it a pretty strong buy vs. the overall stock market. Especially, when you consider it’s yielding a hefty 6%.
Source: InvestorPlace
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