they have $49 billion in debt. how much of this sale will go to debt payment and how much would it actually take down debt.
$61 billion in assets plus $23 billion in goodwill. they added 30% of total assets with that. i know payment above a certain value adds goodwill, but $23 billion is excessive to say the least. sounds like they got hosed.
i would say your right on.
they need the cash for 2017.
and people think the dividend will be going right back up.
balance sheet is about the same as ever. $49 billion in debt. $61 billion in real assets. then they add $23 billion to artificially raise the book value. how is it shaping up if not much has changed.
exactly on the table and noted from slide 9. $1 increase in oil equals $6.5 million dcf impact. estimated $4.7 billion dcf, $3.6 excess after dividend. if oil gopes up $10, that is roughly $65 million more for kmi dcf. using $4.7 billion dcf, then 1% equals $47 million. so $10 increase in oil is plus $65 million dcf which is about almost 1.5% increase in dcf. so oil goes up $10, dcf up 1.5% of total $4.7 billion. the impact is of course positive, plus 1.5% increase in dcf for every $10 increase in oil is great. but yet the price of oil on the total dcf is minimal. you read some of these posts where i think people believe if oil goes up $20, that dcf goes up 50% or something and therefore the stock will explode higher but the fact is a $20 increase in oil raises the dcf of $4.7 billion by less than 3%. actually, the price of oil is not a big factor, but the big factor is the amount of oil and natural gas that needs transporting, the volume of it. which of course should increase in demand in the future.
i hope so but according to kinder morgan, if oil goes up $1, they get an increase of $6.5 million and vice versa if it goes down. therefore if oil goes up $10, kmi makes $65 million more on a $10 increase in oil. if all that $65 miilion could go right to dcf. it would raise dcf a little over 1%. so basically, the price of oil going up for the amount it adds to dcf is very minimal. a definite psychological thing for investors but way overstated in importance to increasing dcf. if oil went up $20 per barrel, it adds only about 2 to 3% more in possible dcf above the $5 billion estimate. oil price is not that big a factor. for kmi it is more the end demand for how much volume needs to be moved, not exactly the price of the product being transferred.
what has trump said that is slanderous. crooked hillary. she is crooked. slander is saying something totally unture against someone. what did he say that was slander.
just an idiot. does he think management sets the stock price at the market level. also, people make the mistake that this trades right with oil. actually the price oil does not effect it much on the profit side or the cash flow. every $1 increase in oil adds I think about $6.5 million in more cash flow coming in. so $10 in oil price increase adds about $65 million in cash flow more or less. they have $5 billion in free cash flow. 1% of that is $50 million cash flow, so a $10 increase in oil gives a little over a 1% increase in cash flow. actually it is minimal and therefore just because oil goes up a little does not mean kmi will skyrocket in share price. kmis big factor is really the demand by the need for their services to transport oil and gas not how much oil is a barrel.
exxon always has a long term forecast on their website and their research shows that oil will increase in demand until at least 2040 and still be the number 1 fuel as the demand in asia will be growing huge over the next few decades. also, natural gas percentage wise will be the biggest growth demand area through 2040. wind and solar will grow a lot but still be a small percentage of the whole with oil and natural gas the biggest. the above scenario is a long time from now and natural gas is predicted to have demand growth beyond that and be here for a long long time. not to mention what unkaphil points out about agriculture. natural gas especially will not be a buggy fuel anytime soon or maybe anytime in our lifetime.
consistent revenue and profit growth and strengthening balance sheet over time with a maybe slow but sure dividend increase over the years will take it up. but it takes time.
you are wrong to think that if oil is up 4%, then kmi should be up 4% or vice versa. kmi has some correlation but not that much. it is not like if oil was up 50%, then kmis profit would be up 50% or vice versa. it is just not that direct.
kmi did not go from $40 to $15 just because oil fell. and all though there is some correlation, kmi will not skyrocket back to $40 even if oil goes way up.
their future can be great and they have made good changes. if you look in the news section where they have a new article at the top from motley fool where kmis founder lays out the new strategy going forward. it is a solid strategy and sets them up to be stronger in the future. they do not want to be a dividend darling anymore but more of a strong stable revenue generating growth company. that said, i agree sips do not turn on a dime but kmi is turning in the right direction. and it will take time and as investors see these results over the next few years, the stock should be a good long term bet. but some people here of course are pessimistic after what happened any many people in the investment world want to see kmi put out some proven results that the strategy is working and that of course will take multiple quarters and years. you have to be patient. others here for some reason are still delusional thinking nothing did happen and that it is all someone elses fault and that investors should think this is gods gift to the investment world and that kmi should be trading in the 30s or higher and people should be pouring into it. they are about fairly valued now and with a low dividend rate at this price. as they grow, the price should rise but at this point it is somewhat fairly valued. seems odd all these post about how it is so wildly undervalued. it really is not at this point.
not exactly a fan of hillary myself but kmi¨s fundamentals and the share price at this time are hardly wildly undervalued. natural gas will grow for sure but that does not mean this should have some 30 or 40 p/e with their performance which would give them about a less than 2% dividend for a company that has heavily fluffed their balancesheet with $23 billion in goodwill. it is good company but not that exceptional to pay caviar prices for.
actually if they make a $1 eps annual in the futrue it gives them about an 18 p/e and a 3% yield at current price. about fairly valued. the price was not driven down for unwarranted reasons. it was way overvalued to begin with in the 40s and 30s driven up by people who saw nothing but a sky high growing divedend rate and poured money into it inflating the price and believing everything kinder said. it became clear their model for this was not rock solid and their finances and fundamentals were not rock solid and people started to cash out and it came back to reality and the dividend was unsustainable or they would not have had to cut it. now they are a solid company with good growth prospects but at a reasonable price now with a 3% dividend or so and mediocre earnings. they were good but not great. there is no reason people are going to pour into this at this point. there are plenty of companies with great growth potential, there are plenty with higher dividend rates and solid track records for decades of growing the dividend. so that is no longer an attraction to kmi. they do have growth prospects but it is just not shining bright. but management did &%$ up. they lured in naive dividend investors when the share price was in the 40s with promises of dividend increases that they could not keep and set these people up to get their investment slaughtered when for months they should have been able to know that this might not be the case. they were either really inept or as i suspect knew all along even when they reassured investors a week before the dividend cut. they are not totally linked to oil but their fundamentals did detiorate. there is no justification for this to have a 30 p/e or some big increase in the pps. not to mention they have about $83 billion in assets of which $23 billion is goodwill. which basically makes the book value of $15 ps about $10 ps of just fluffed goodwill.
have you even read the news the last 6 months for this. they have plenty of cash flow now. but the biggest joke from kmi is their book value. they have truly about $61 billion in assets less the $50 billion debt gives about $11 billion in real worth but then kmi throws in $23 billion in goodwill raising assets to $84 billion less the $50 billion debt gives them $34 billion worth. $34 billion instead of $11 billion. they do this to give a huge over inflated book value per share which is almost 2/3 goodwill per share. so all this book value they use is a majority goodwill which is not at this point cash, receivables, or anything like equipment or real assets. but you do not have to have cash on hand to cover debt, using that to say they might go bankrupt is silly.
they service the debt with future revenues and their excess cash flow in the future generated from those revenues. you do not need to have enough cash on hand for that.