10Y annualized return is
negative
at -4.6% per year
KMI has met or exceeded earnings expectations in
few
recent quarters (2/10)
Moderate Valuation Ratios
Strong Profit Margins
Good Return on Equity
Interest Coverage Ratio
🏗️ Strong Project Backlog
🔒 Competitive Moat and Market Position
🚀 Growth Opportunities in Natural Gas
📈 Expected Financial Growth
High Price to Sales Ratio
High Dividend Payout Ratio
Weak Liquidity Ratios
Elevated Debt Levels
⚠️ Commodity Price Sensitivity
Overall, Kinder Morgan exhibits strong business quality through its significant project backlog and competitive positioning in the natural gas market. Future prospects remain promising, bolstered by anticipated growth in demand and favorable financial projections; however, exposure to commodity price volatility could pose challenges.
Analysis Date: January 22, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Kinder Morgan, Inc. is a company that helps move energy products around North America. They operate a vast network of pipelines that transport natural gas, oil, and other fuels. They also manage facilities where these products are stored and handled, like terminals for gasoline and diesel fuel. In simple terms, Kinder Morgan makes sure that energy supplies get from one place to another safely and efficiently.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
While the top- and bottom-line numbers for Kinder Morgan (KMI) give a sense of how the business performed in the quarter ended March 2025, it could be...
Kinder Morgan beat top line estimates in Q1'25, but missed on earnings. Despite underperforming rivals in terms of dividend growth, Kinder Morgan's na...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$45.32
Current Market Price: $25.31
IV/P Ratio: 1.79x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
44.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for KMI
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (21.49)
P/B ratio ≤ 1.5 (1.84)
Current ratio ≥ 2.0 (0.49x)
Long-term debt < Net current assets (-11.50x)
Margin of safety (44.0%)
KMI does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
8.64%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-25)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
46.61%
Higher values indicate better efficiency in production
TTM (as of 2025-04-25)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
17.29%
Higher values indicate better overall profitability
TTM (as of 2025-04-25)
KMI boasts a gross profit margin of 46.61% and a net profit margin of 17.29%, indicating efficient cost management and strong profitability relative to revenue.
With a return on equity of 8.59%, KMI is generating a reasonable return on shareholder investments, showcasing effective use of equity financing.
KMI's dividend payout ratio of 97.86% suggests that nearly all profits are being paid out as dividends, which may limit reinvestment in growth opportunities.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.99x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
0.49x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
An interest coverage ratio of 4.65 indicates that KMI can comfortably meet its interest obligations, reflecting good financial stability.
The current ratio of 0.49 and quick ratio of 0.39 suggest that KMI may struggle to cover its short-term liabilities, indicating potential liquidity issues.
With a debt to equity ratio of 1.04 and a debt to assets ratio of 0.44, KMI has a significant amount of debt, which could pose risks if cash flows become constrained.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Kinder Morgan has an impressive project backlog totaling $8.1 billion, indicating robust future revenue potential. The company has added $6.3 billion in new expansion projects and placed $1.2 billion in service. This expansion is critical as it supports long-term contracts with creditworthy customers.
The company has established a strong competitive moat due to its extensive infrastructure in key demand areas, such as the Gulf Coast and Southeast regions, allowing it to serve 45% of LNG export demand and significant portions of power demand. Its reputation as a reliable operator further enhances its competitive edge.
Kinder Morgan anticipates significant growth in natural gas demand, projecting an increase of 28 Bcf a day by 2030. This demand growth is driven by LNG exports, power generation, and industrial use, positioning the company well for future expansion.
The company is projecting an 8% growth in net income and a 10% growth in adjusted EPS for 2025. Furthermore, the acquisition of Outrigger is expected to be immediately accretive, indicating strong financial health and operational expansion.
The company highlighted sensitivity to commodity prices, which can impact earnings. A lower-than-expected commodity price environment may pose risks to financial performance, emphasizing the need for monitoring these external factors.