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Kinder Morgan Holds Steady After IPO

NEW YORK ( TheStreet) -- Shares of pipeline transportation and energy storage company Kinder Morgan (KMI - Get Report) have been ticking lower since its first-day closing price, but remains above its initial public offering price of $30.

Shares of the company were flat at $30.93 during afternoon trading.

"As new issues trade, there's a lot of dancing and courting by investors and the company," said financial modeling and valuation expert Scott Rostan, a principal and founder of training at Training The Street and Merrill Lynch alum. "There's a natural ebb and flow that often happens."

Rostan added that the weakness can also be attributable to a healthy run-up in the market in general -- and profit taking. That the stock continues to trade above its offering price is a good sign, he noted.

Kinder Morgan made its debut as one of the hottest IPOs so far this year. Last Friday, the day after its price offering was announced, shares of the company ended the trading session at $31.05, up 3.5%.

Morningstar analyst Jason Stevens noted in a report that he thinks Kinder Morgan will be able to raise dividend payments by nearly 11% annually, from the annualized $1.16 figure Morningstar expects for 2011. The analyst is impressed with Kinder Morgan's assets, which he describes as "attractive, consistent cash-flow generators."

Last Thursday, the company said its initial public offering of 95.5 million shares was priced at $30 -- above the expected range.

The company had expected to offer 80 million shares.

In total, the company raised $2.9 billion from the IPO.

If overallotments are exercised, the deal could raise up to $3.3 billion, making Kinder Morgan's IPO the largest energy IPO of the decade and the largest IPO this year, Stevens noted in his report.
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