Dividends4Life: Is Dividend Stalwart Kinder Morgan (KMI) Turning Into a Loser?

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Dividends and pipeline juggernaut Kinder Morgan (KMI) go hand in hand. Born from the good remnants of defunct Enron, the firm pioneered and popularized the master limited partnership to help it expand and grow into an energy logistics behemoth. Along the way, KMI has managed to push plenty of the cash flows from its pipelines, terminals and other midstream assets back into the hands of its investors. And then things got weird. Not actually weird per se, but still a tad strange.

Kinder isn’t acting much like the KMI of old. Several recent moves by the firm are a tad bit puzzling and could potentially signal that cracks are starting to form in the largest midstream firm’s armor. While calling KMI a “loser” is still a bit of stretch, there plenty of concerns that investors need to be thinking about. So is Kinder Morgan and KMI a lost cause? Not exactly. The firm’s massive array of assets do throw off plenty of cash flows and its coverage ratio is basically 1 — meaning that cash flows cover its current payout. Going forward, however, things may not be as rosy for Kinder as planned. Being forced to use relatively expensive methods of raising cash defeats the whole purpose of swallowing its MLPs in the first place.

Source: InvestorPlace

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