KMP's balance sheet worries me a bit. Doesn't seem like their operating income covers the dividend. Common shares have increased from about 200m to 330m over the last 5 years or so. They seem to be paying a good chunk of the distributions by issuing more and more common stock. This doesn't seem to be a good way to run a company. Is it sustainable? Opinions.
I think it is sustainable as long as there is a high demand for their stock, which there is. They have a lot of levered free cash flow as well, but I don't think it's enough to pay the entire dividend. I'm not an expert on dividend distribution or evaluating the many elements of cash flow, but in the mean time, I think KMP is still a buy.