How much debt does KMP have? The only thing that worries me about KMP is it future capital costs. If they have a ton of debt that will become more expensive if its not already locked in at low rates. Also future projects will cost more because financing costs will be higher. KMP is dropping because bond yields are increasing...that doesnt really worry me since a 10 yr is 2.5-2.6% and I just bought bought more KMP at $78.1 which yields 6.665% assuming the distribution stays where it is. Ill take that over bond yields any day of the week. I would think that KMP will continue to be able to increase its distribution over time correct?...It has been doing so consistently for over a decade now and I dont see why it would stop now...right in the middle of an energy boom. This screams buying opportunity to me if you can handle short term volatility but again if someone has insight on the debt load/future requirement of KMP that would be very helpful.
Rising interest rates should have no impact on earnings for this quarter,but the market is pricing it in as if it will.Also they can and are raising capital by increasing the distribution,basically printing their own money.I guess the selling is being done by HFT computers because no rational person would be selling now.That's what happens when you let computers make decisions.
I don't worry about Capital Costs. The Fed will keep short term interest rates near zero for years per Minneapolis Fed President in WSJ 6/25. It has worked out well for Richard Kinder to run the business and the limited partners simply bank the Distributions.