Kinder Morgan becomes Conviction Buy at Goldman

Kinder Morgan (KMI) rose today while most energy peers fell, thanks to Goldman Sachs' addition to its Conviction Buy list.

KMI's status as the largest gas pipeline operator in North America means KMI should win multiple growth projects in coming years, Goldman says; KMI has identified $15B of potential natural gas growth projects, of which only $2.7B is in its current backlog as of its late January analyst day, so the firm sees large potential upside to its organic growth capital spending in gas alone.

KMI also provides well diversified, highly stable, fee-based cash flows and solid 8%-10% annual dividend growth, Goldman says, believing shares are attractively valued on an absolute basis.

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Comments (12)
  • tomlos
    , contributor
    Comments (1299) | Send Message
    welcome to the club GS..
    15 May 2014, 05:19 PM Reply Like
  • Sum02006
    , contributor
    Comments (460) | Send Message
    Took them long enough to find their conviction...
    15 May 2014, 05:22 PM Reply Like
  • Brandond
    , contributor
    Comments (509) | Send Message
    Complete no brainer; 5% yield with a lot of capital appreciation upside and minimal downside. I like this bond equivalent better than a 2.5% 10 year bond that will lose money when rates rise. Hedgeye has brought this down but they are rapidly losing credibility; see this article if you want a good read.

    15 May 2014, 05:31 PM Reply Like
  • crash9010
    , contributor
    Comments (183) | Send Message
    I like it when I am ahead of the big boys.
    15 May 2014, 05:31 PM Reply Like
  • jesstradin
    , contributor
    Comments (145) | Send Message
    Just want to add a thought here.Usually they will do what they can to get a good price for their customers.
    15 May 2014, 05:42 PM Reply Like
  • George P. Burdell
    , contributor
    Comments (298) | Send Message
    Agree with ALL comments above... was very pleased with the opportunity to add significantly to a long held position with the market this high...


    This is a strong company with strong leadership..
    15 May 2014, 05:43 PM Reply Like
  • GregT
    , contributor
    Comments (701) | Send Message
    KMI has been one of my very few purchases in the last year where I "know" I'm getting a very good investment at an attractive price. I made it my second largest holding.


    Will collect my 5% divvy and enjoy the 8% growth. Very few investments out there with this kind of initial yield and growth. And to get it in a company with such a stable business and great management makes it a truly incredible investment.


    Greg - whose only fear with KMI is that I did not buy enough shares.
    15 May 2014, 06:25 PM Reply Like
  • rheimerl
    , contributor
    Comments (494) | Send Message
    take a look at bip as well... i own kmi as well
    15 May 2014, 06:44 PM Reply Like
  • surfgeezer
    , contributor
    Comments (10338) | Send Message
    Dang it, I was not done selling Puts.
    15 May 2014, 08:23 PM Reply Like
  • $stockme$
    , contributor
    Comments (5) | Send Message
    KMP here...hope to ride the KMI waves
    15 May 2014, 09:11 PM Reply Like
  • lsuavecito
    , contributor
    Comments (2577) | Send Message
    Wait till GS discovers KMR! Oh, Lawdy Ms. Clawdy!
    15 May 2014, 11:36 PM Reply Like
  • Uain53
    , contributor
    Comments (1808) | Send Message
    Fasten your seat belts lads!


    I expect the big accounts are invested, so they are talking up the stock. Then collect divs and Cap App.. Next quitely sell some of the appreciation. Then talk the stock down to the next desired strike price.


    Wash, rinse, repeat to create an cash stream for other investments.


    I have a 5% (KMI) position in my retirement portfolio, so I will just let the divs drip and surf the waves.
    16 May 2014, 12:45 AM Reply Like
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