Monday, September 29, 2014

Recent Buy

Today i was fortunate enough to add an another company to my portfolio. After my resent selling tsunami, I have been moving more towards the portfolio that I wanna hold on, for longer period of time.

Let's play a little game, try to guess what company this is.

  1. Moves about 1.3 Bcf per day of CO2
  2. Liquids terminal capacity of 125 MMbbl
  3. Transports about 2.3 MMbbl of petroleum products per day
  4. Only oil sands pipeline serving Canada’s West Coast,moving crude from Alberta to British Columbia and Washington
  5. Dry bulk terminals store and handle more than 100 million tons per year of materials
  6. Owns an interest in or operates approximately 80,000 miles of pipelines and 180 terminals

Yes it's Kinder Morgan Inc (NYSE: KMI)

Kinder Morgan is the largest midstream and third largest energy company (based on enterprise value) in North America.

I bought 53 shares of Kinder Morgan Inc (NYSE: KMI) this stock is currently trading at: 
  • Price: $38.47
  • P/E: 33.33
  • Dividend: $0,43 (Quarterly)
  • Yield: 4.47%
  • EPS: 1.15  
This purchase will add approximately $91.16 to my annual dividend income.

Recently Kinder Morgan Inc (KMI) Announced following.

HOUSTON--(BUSINESS WIRE)--Aug. 10, 2014-- Kinder Morgan, Inc. (NYSE: KMI), Kinder Morgan Energy Partners, L.P. (NYSE: KMP), Kinder Morgan Management, LLC (NYSE: KMR) and El Paso Pipeline Partners, L.P. (NYSE: EPB) today announced that KMI will acquire all of the outstanding equity securities of KMP, KMR and EPB.
  • KMP unitholders will receive 2.1931 KMI shares and $10.77 in cash for each KMP unit. This results in a price of $89.98 per unit, a 12 percent premium based on the Aug. 8, 2014, closing prices. This is a premium of 11.4 percent based on the July 16 closing price reference date used by the parties during the negotiation of the transaction.
  • KMR shareholders will receive 2.4849 KMI shares for each share of KMR. This results in a price of $89.75 per share, a 16.5 percent premium based on the Aug. 8, 2014, closing prices. This is a premium of 16 percent based on the July 16 reference date used by the parties in the negotiation. The parties negotiated consideration for KMR shares equal to the consideration for KMP units, using the July 16 reference date.
  • EPB unitholders will receive .9451 KMI shares and $4.65 in cash for each EPB unit. This results in a price of $38.79 per unit, a 15.4 percent premium based on the Aug. 8, 2014, closing prices. This is a premium of 11.2 percent based on the July 16 reference date used by the parties in the negotiation.
  • Both KMP and EPB unitholders will be able to elect cash or KMI stock consideration subject to proration.

After this announcement i got rely interested about the futures of this company, so i started to learn more, I did all ready have my eye on it before few times, but I didn't have the capital to make the purchase back then and that is too bad, since after this announcement every stock on KMI enterprise got more valuable, and i did not wanna pay too much premium, because of the merger. No the stocks have been settling for a while and I decided to make the move and bought it.

What comes to dividend, it just gets more interesting. Kinder Morgan's merger and announcement about dividend plan means a $2/share dividend in 2015 growing to $3.22/share in 2020. This would mean above 8% yield on today's price, and that kind of dividend growth is likely to bring strong capital gains. Will be interesting to see, if they are able to meet with these goals. Now i can just sit back and hope for the best.

thanks for reading.

photo: By cuteimage


  1. Thanks for sharing your recent buy with us. KMI and the Kinder Morgan world has definitely been very popular among many of the dividend blogger portfolios for a while now. The juicy yield, continued growth and sustainable business make for a good long term investment. Adding almost $100 in annual income from this purchase doesn't hurt either. Look forward to your next purchase/update.

    1. Yet again nice buy under your belt! I still can't follow on your lead, I own already too much KMI compared to size of my portfolio =)

    2. If you think the company is rely good you just should buy it with two hands. At least that's what Buffet is saying. I hope the KMI will bring me that good increased dividend for year to year.

      Maybe you can follow on my next buy :)

      thanks for commenting! both of you!