Kinder Morgan: Growing Natural Gas Demand, But Dividend Coverage Is Worsening

Power Hedge
Investing Group Leader
(25min)

Summary

  • Kinder Morgan's Q1 2025 earnings showed a 10.39% revenue increase but a 3.89% net income decline, highlighting decreasing gross margins.
  • Adjusted EBITDA rose 1% year-over-year, which is lower than some peers have delivered in recent quarters.
  • The company has a number of natural gas projects under development. These provide the company with growth potential through at least 2029.
  • Dividend coverage worsened, with free cash flow insufficient to cover dividends, suggesting potential future financial strain.
  • Despite a strong natural gas demand outlook, Kinder Morgan's current high valuation and weakening dividend coverage make it a hold rather than a buy.
  • This idea was discussed in more depth with members of my private investing community, Energy Profits in Dividends. Learn More »
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Denis Shevchuk

On Wednesday, April 16, 2025, midstream giant Kinder Morgan, Inc. (NYSE:KMI) announced its first-quarter 2025 earnings results. Kinder Morgan is usually one of the first midstream companies to publish its quarterly earnings numbers, and as such, it can give us an

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This article was written by

Power Hedge
15.65K Followers

Power Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields.

He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of MPLX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This article was originally posted to Energy Profits in Dividends in the middle of the trading day on April 22, 2025. Subscribers to the service have had since that time to act on it.

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