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Kinder Morgan Energy Partners Message Board

  • roym717 roym717 Mar 14, 2012 7:49 PM Flag

    KMP Down Again!?

    Why do we keep going down? Is the dividend still safe?
    thank you.

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    • You're a member of the stocks don't go down club, right?

      Recent high of $89, 6-month low of $66.84 up $22.16 in 5-months and you didn't sell? 33% price appreciation if you do the math. But, I guess it could continue up another 33%? NOT! Use a trailing stop on your up, up and away stocks and keep increasing the stop price.

      $22.16 divided by a roughly $5 dividend is 4 years of dividends if you sold at $89. $82-$66.84=$15.16 or almost 3 years of dividends if you sell here.

      $5 dividend on a $90 price is a 5.5% yield. $5 dividend on a $66.84 is 7.48% yield. If they loved it at 7.84% they may be having second thoughts at 5.5% or a 190 basis points drop in yield.

      I'm working on graphing the yield based on the current distribution to pick out buy and sell points based on yield.

      Anyway, I have a long term core position in KMR in a taxable account. I'm just holding on to it. KMR has a 6.56% yield here which is still good to go for me.