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Kinder Morgan Energy Partners Message Board

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  • NORCROSS2 NORCROSS2 Jun 15, 2012 3:03 PM Flag

    Why does KMP look like FB

    Alright folks, I was just asking a question. Who are the sellers? I did not mean to say that we should all sell. Sooner or later, the El Paso people will run out of selling ammunition and KMP will go back to being a proper dividend paying company. Same will be true for the rest of the MLP's. This selling will pass. KMP at a dividend rate of 6.4% puts it at a virtual pe of 16. That's fine.

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    • 1. Not an owner of KMP, KMR, or FR, but (and this falls into the category of "words have meaning") it's my understanding that (and I could be wrong) KMP "distributes" "distributions", not "dividends", so KMP can never "go back" to being a "proper dividend-paying company" - it's a partnership, not a corporation. KMR IS a corporation, KMP is a partnership.....
      2. Re: Facebook & El Paso (previous posting) - is "over-owning" a new investing term? What does that mean? Who were the original "owners" of FB,(prior to the IPO) and who did the buyers buy from - granted, I don't understand how IPO's work>)
      Not trying to be smart-aleck, just trying to learn...
      (here just as prospective buyer, but reading various posts here, it sounds like "greek" to me - the comments comparing KMP/KMI/KMP)
      .....Anyone?

      • 2 Replies to uhlerf
      • alright. Now about the question, what is over-owned? It is not a new term. It was used in 1999-2000 for sure when millions of new investors poured into the purchase of shares of Tech and dot-com stocks and ran the prices up to unreasonable levels. There were too many owners and many were looking for the buying to go to sky-high levels. That is "over-owned." Then when many started selling for whatever reason, a cascade effect resulted....same with our housing market. Regarding the IPO market, books could be written about it, so I won't try it myself.

      • to uhlerf et al: right about the term dividend, yes Yahoo lumps all of it into their indication of "dividend" and I was just thinking and typing too fast when I made my posts. Sorry. Then the lincoln poster got me looking for the distribution rate for FMR. Both Bloomberg and Marketwatch listed it as "blank" in the dividend column, which as you point out is correct. So still in Marketwatch I had to click on a news article about FMR to find out its "yield" at about 6.6%. So "yield" is a good way to express all these distribution rates. So looking at FMR, for those who are in a high tax bracket FMR is the best choice, not the mlp. Kinder has purposely made KMI and KMR more advantageous to some investors for their growth rates in yield. The only problem is that now with the El Paso purchase and with Kinder Morgan as a whole being reputed to be "the second largest oil producer in the state of Texas", all their investment vehicles should (or will) trade with the price of oil(it is said by some). Traditional KMP owners usually believe that they are just owning mainly the flow-rate of the Kinder pipeline system(fees paid or contracts), so their shares should trade like Yield-paying shares.

 
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