Kinder Morgan Inc. (KMI): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


Kinder Morgan, Inc. is one of the largest midstream energy companies in North America. During the second quarter, it improved its topline from the year ago period due to higher volumes in most of its businesses. Going forward, we believe Kinder Morgan will be able to seize attractive investment opportunities in the near term, particularly in the Eagle Ford and Haynesville shale plays. To shore up growth, the company is moving forward with its planned $17 billion investment in the expansion and joint venture investments at Kinder Morgan Energy Partners and El Paso. The steady rise in dividends is also a positive. However we feel all the above positives have already been factored in the current share price. As such we are maintaining our Neutral recommendation.


Texas-based Kinder Morgan, Inc., (KMI) is one of the largest midstream energy companies in North America, operating approximately 80,000 miles of pipelines transmitting natural gas, refined petroleum products, crude oil, carbon dioxide and additional products. It has more than 180 terminals that store petroleum products and chemicals, as well as ethanol, coal, petroleum coke and steel.

KMI owns the general partner (GP) interest and incentive distribution rights (IDRs) of Kinder Morgan Energy Partners, L.P. (KMP) and El Paso Pipeline Partners, L.P. (EPB). The company also owns limited partner units of KMP, Kinder Morgan Management, LLC (KMR) and EPB. KMP is considered to be one of the leading publicly traded pipeline limited partnerships in America.

The company's reportable business segments comprise KMP's first five segments as well as NGPL PipeCo LLC. These include:

KMP - Products Pipelines, Natural Gas Pipelines, CO2, Terminals, Kinder Morgan Canada

NGPL PipeCo LLC - KMI holds 20% equity interest in NGPL PipeCo LLC that is considered to be a major interstate natural gas pipeline and storage system.

KMI-EP Merger

On May 24, 2012, Kinder Morgan, Inc. completed the acquisition of El Paso Corporation. The agreement - announced on October 16, 2011 - created the largest natural gas pipeline system in North America. The purchase price, including El Paso's $17 billion outstanding debt, was $38 billion. Kinder Morgan shareholders own approximately 68% of the combined company and El Paso shareholders hold the balance 32%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: EPB , KMI , KMP , KMR

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