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Kinder Morgan Concludes Transactions With Pembina Pipeline

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Kinder Morgan, Inc. KMI recently announced the divestment of its stakes in Kinder Morgan Canada Limited and the U.S. part of the Cochin Pipeline to Pembina Pipeline Corporation PBA.

For the sale of a 70% interest in Kinder Morgan Canada Limited (Kinder Morgan Canada), Kinder Morgan is expected to get 25 million shares of Pembina. Precisely, the transaction’s exchange ratio signifies that for holding each Kinder Morgan Canada share, Kinder Morgan is anticipated to get .3068 shares of Pembina. Notably, Kinder Morgan has expressed its intension to convert those shares into cash. Investors should know that all the outstanding stocks of Kinder Morgan Canada have been acquired by Pembina.

Included in the deal, Pembina has sealed the purchase of the Cochin Pipeline’s U.S. portion for a consideration of $1.546 billion. Being regulated by the Federal Energy Regulatory Commission, the U.S. portion of the Cochin Pipeline spreads to the International Boundary near Maxbass, ND, from the station of Kinder Morgan near Riga, MI.

The proceeds from the divestments will primarily be utilized by Kinder Morgan to lower its debt burden, which could create financial flexibility of $1.2 billion. The company added that if it allocates the amount to buy back stocks or growth projects, it will be able to boost its DCF per share growth in 2020 to 5-6% from 3%.

Headquartered in Houston, TX, Kinder Morgan currently carries a Zacks Rank #3 (Hold). Meanwhile, a couple of better-ranked players in the energy space are Murphy USA Inc MUSA and Shell Midstream Partners, L.P. SHLX. Both the stocks sport a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA beat the Zacks Consensus Estimate in three of the prior four quarters.

Shell Midstream has a positive earnings surprise of 2.2% for the past four quarters, on average.

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Shell Midstream Partners, L.P. (SHLX) : Free Stock Analysis Report
 
Murphy USA Inc. (MUSA) : Free Stock Analysis Report
 
Kinder Morgan, Inc. (KMI) : Free Stock Analysis Report
 
Pembina Pipeline Corp. (PBA) : Free Stock Analysis Report
 
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