Kinder Morgan, Inc. operates as an energy infrastructure company in North America. The company operates through Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. The company owns an interest in or operates approximately 84,000 miles of pipelines and 153 terminals. To give you an idea of how much pipelines they operator, it’s enough to circle the earth a little more than three times.
But the company is always looking to add to their pipeline inventory. Kinder Morgan is close to buying two South Texas pipeline systems that Dallas-based Southcross Energy Partners LP (OTCQX: SXEEQ) has put up for sale. In addition, Kinder Morgan is about to wrap up a joint project that will move natural gas out of the Permian Basin to a terminus near Corpus Christi.
Since Kinder Morgan, Inc. (NYSE:KMI) released its earnings in June 2019, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 4.9% in the upcoming year relative to the past 5-year average growth rate of -0.7%. Presently, with latest-twelve-month earnings at US$1.5b, we should see this growing to US$1.5b by 2020.
Earlier this month, an executive chair of the board, Richard Kinder, bought an additional 300,000 shares for a total cost of $5.9 million. So does Richard know something we don’t know? Probably, Richard is considers an insider and insiders only buy when they feel the stock price is undervalued.
However, when I look at the chart, I’m not seeing anything special. When looking at the monthly chart, price has been in a $10 range for more than three years. And what's bad enough price is closer to the upper support line vs. the bottom support line, meaning upside opportunity might be limited.
Despite an insider buying more shares, I think there are better Reward to Risk opportunities out there. Thus, in my opinion, Kinder Morgan is a hold at this time.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.