I'm new at watching this stock and noticed that since it went ex-dividend it's pretty much been a straight selloff with no news behind it. Is this kind of normal as investors are flipping it for the dividend until the next dividend run up?
remember its an MLP...so they do a full distribution. Of course it drops as they now have less value (ie they just paid out the dividend). It will increase again if it looks like dividends and rate is safe. If not, she can correct down fast, but will the use of fuels stop? Or decrease? Another MLP what would be a good hedge to this one is the one for natural gas drilling by chesapeake. They have an MLP listed as chkr. Its dividend is ridiculous and stock price low as nat gas has been lagging other fuel prices. This may be changing however.
This is not a growth stock but just a great company paying a great dividend. Would you say that a three percent drop is significant? I believe there was some disappointment that the dividend was only raised by one cent this quarter. But that is just positioning KMP to raise it by more in subsequent quarters IMO
MLPs have most definitely been growth investments. Benchmark MLPs such as KMP, EPD, MMP, or PAA against the S&P500 using a Max chart overlay. MLPs over the past decade have broadly outperformed the S&P500. I own about a dozen MLPs and many of them are 5 baggers. I will continue to hold MLPs until the Fed signals interest rates are out to rise. Historically there has been a 250 Bpt. to 350 Bpt. spread between the yield of MLPs and the yield of 10 year treasuries. When the Fed decides to raise rates it will be time to dump MLPs because unit prices will have to fall to maintain the historical spread between ten year Treasury notes. We're probably a few years away from this happening so sit back, relax and enjoy your distributions.
Don't forget about buying some of the GPs like ETE. Performance has been equally outstanding