5. Kinder Morgan Energy Partners (KMP) is a pipeline transportation and energy storage company operating in five business segments: Products Pipelines, Natural Gas Pipelines, CO2, Terminals and Kinder Morgan Canada. The company owns interest in almost 28,000 miles of pipelines and 180 terminals.
For the second quarter of 2011, KMP increased its quarterly cash distribution per common unit to $1.15 ($4.6 annualized), rising 6% from the second quarter of 2010. The company has increased dividend distribution for six consecutive quarters and has a current dividend yield of 6.2%. The five-year net growth rate for dividend per share stands at 7.1%.
During the quarter, KMP reported 3% increase in revenues to $2.02 billion from the year-ago quarter. Cash and cash equivalents for the quarter more than doubled to $353 million from $129 million in same quarter prior year. Net income before certain items for the quarter increased 7% to $393.1 million from the corresponding quarter in 2010. The company foresees significant growth opportunities in the midstream energy sector, particularly natural gas shale plays and the coal export business.For full-year 2011, the company expects to declare cash distribution of $4.60 per unit, or 4.5% higher than $4.40 per unit in 2010. Looking ahead, KMP estimates that each $1 change in the average WTI crude oil price per barrel would impact the CO2 segment by almost $5 million, or less than 0.2% of the company's combined business segments' anticipated earnings before DD&A. Of the 17 analysts covering the stock, 29% recommend a buy and 65% rate a hold. Analysts polled by Bloomberg foresee the stock gaining an average 12.8% to $76.58 in the upcoming 12 months.
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