This guy is a short. Dont listen. He is totally wrong. You can think of KMI as a Utility company, As we all know Utility companies carry lots of debt but their cash flow carries them thru. So, like a Utility they pay the debt and dividends with strong cash flow. Richard Kinder knows the model and has put his money where his mouth is.Also, short interest is about 52 million shares with 3.2days to cover.
They will cover soon.
Other part is T.B Boone predicts oil at over $70 by Dec. So relax and enjoy the dividends.
This is warmed over dribble from last year. They have not proved that the dividend is unsustainble. You would need to study the DCF in more depth. Their logic is flawed. KMI is complex business but steady cash flow business.
Never make a decision with one sided data. Read this article for a more objective view.
Over the past month or so, Kinder Morgan (NYSE:KMI) has declined around 10% or so. The stock is now trading for below $40 per share for the first time in quite a while. This drop is partly due to the move higher in interest rates, with the 10-year rising to above 2.40%, an 8 month high. However, something else is in play, namely a slew of bearish articles from the likes of Barron's and friends.
I guess you dont remember 2008 financial crisis. Many stocks have had their NAV also cut in half.
Meanwhile people that bought 10 years ago collected $14.6 but lost only $7 on NAV. Thats 50% return over 1 years or 5% per year close to the S&P.