Kinder Morgan Dividend Cut

Kinder Morgan Inc (KMI) announced a 2016 outlook for the company and with that, announced a dividend cut in order to get the cash flow under control. The dividend distribution amount for 2016 is $0.50, down from an annual rate of $2.04, which results in a 75.5% cut. I shared my thoughts on Kinder Morgan yesterday in this article here. The forward yield going forward is 3.18%.

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My Thoughts on Kinder Morgan

Kinder Morgan has been a core holding for a lot of dividend growth investors and I have received a lot of questions from readers about my thoughts on the company and the future prospects.

Kinder Morgan has had a spectacular fall from its peak from $44.71/share in Apr 2015 to $15.82 today (Nov 07 2015). In a way, this shouldn’t have come as a shock – Kinder Morgan has been on a debt binge (just like a lot of other companies out there – so look out for similar outcomes in other companies!) and is now close to $43B in long term debt fueling its growth and investments. The recent ratings downgrade from Moody’s with a negative outlook was a wakeup call for a lot of investors and traders have jumped in to short the stock.

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Kinder Morgan Dividend Increase

Kinder Morgan Inc (KMI) announced a 4.08% increase in its cash dividend! The quarterly cash dividend will increase from $0.49 to $0.51 per share and payable on Nov 13, 2015 to shareholders on record as of Nov 02, 2015. The annual dividend rate goes up from $1.96 to $2.04. Yield going forward is 6.49%. This is Kinder Morgan’s 15th dividend raise since going public in Feb 2011.

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