Kinder Morgan Inc. ( KMI ) reaffirmed its 2014 financial dividend and distribution guidance for Kinder Morgan Energy Partners, L.P. ( KMP ), Kinder Morgan Management, LLC ( KMR ) and El Paso Pipeline Partners, L.P. ( EPB ). Management also expects KMP to generate distributable cash flow per unit in excess of its budget targets.
Kinder Morgan is the largest midstream and the third largest energy company in North America with a combined enterprise value of approximately $100 billion. It owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals.
Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel. Kinder Morgan owns the general partner interest of Kinder Morgan Energy Partners and El Paso Pipeline Partners, along with limited partner interests in KMP and EPB and shares in Kinder Morgan Management.
Per the guidance, strong growth is expected throughout the Kinder Morgan family of companies, wherein $14.8 billion worth of projects have been identified for expansion and joint venture investments.
Kinder Morgan Inc. is likely to declare dividends of $1.72 per share for 2014, up about 8% from its 2013 declared dividend of $1.60 per share. Growth at Kinder Morgan in 2014 is expected to be driven by continued strong performance at Kinder Morgan Energy Partners and contributions from El Paso Pipeline Partners.
Kinder Morgan Energy Partners expects to declare cash distributions of $5.58 per unit for 2014, a 5% increase over its 2013 distribution of $5.33 per unit. The partnership also expects to exceed its distributable cash flow per unit target primarily as a result of the positive impact of tanker acquisition of approximately $962 million in Dec 2013. It expects steady growth opportunities across all business segments, including the need for more midstream infrastructure to move and store oil, gas and liquids from the prolific shale play in the United States and the oilsands in Alberta.
Kinder Morgan Management also expects to declare distributions of $5.58 per share for 2014, which will be paid in the form of additional shares.
El Paso Pipeline Partners expects to declare cash distributions of $2.60 per unit for 2014, a 2% increase over its 2013 distribution of $2.55 per unit.
Both Kinder Morgan Inc. and Kinder Morgan Energy Partners carry a Zacks Rank #3 (Hold). El Paso Pipeline Partners currently carries a Zacks Rank #4 (Sell). However, Kinder Morgan Management is a better-ranked stock with a Zacks Rank #2 (Buy).