2 Recent Buys – GOOGL, KMI

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A quick update on two purchases in my portfolio. Without further ado, here are the details.

  • First purchase: I added to my position in Alphabet Inc (GOOGL) @ $1,175.00. Alphabet is a recently new position in my portfolio that I initiated in August and slowly adding to build to a full position.
  • Second purchase: I added 100 shares in Kinder Morgan Inc (KMI) @ $20.00. KMI is my only pure pipeline play, which has turned things around pretty well over the past couple of years, although it is still pretty leveraged. Not a lot of 5% yielders as the yields continue to fall, so adding this at a 5% yield will increase forward dividend income by $100. It is also expected that dividends will be raised by 25% next spring, so thats a pretty good growth rate.

What are your thoughts on these purchases. Share a comment below.

Full Disclosure: Long GOOGL, KMI. Our full list of holdings is available here.

3 Recent Buys – KMI, RACE, CSU

BuySell

A quick update on three purchases in our portfolios. It is getting harder and harder to find good value plays as the market seems be pushing the boundaries on the valuation front. With a lot of stocks trading close to 52-week highs, pickings have been pretty slim. However, due to an oversized cash position, I decided to pay up and put some capital to work.

  • First purchase: I added 200 shares of Kinder Morgan Inc (KMI) @ $19.97. I wrote more about my KMI decision during my last iteration in March. Click here to read about the reasoning. The stock yields 5.0% and adds $200.00 in annual dividends.
  • Second purchase: I added 25 shares of Ferrari N.V (RACE) @ $165.35. I wrote more about decision to buy this company earlier in July. Click here to read about the reasoning.
  • Third purchase: I added 6 shares of Constellation Software (CSU.TO) @ $1,252.00. Constellation continues to execute well and aggregate small VMS companies led by a brilliant leadership team. A small dividend is paid (yield of 0.4%), but this is a growth-focused stock.

Full Disclosure: Long CSU.TO, KMI, RACE. Our full list of holdings is available here.

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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