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Kinder Morgan(KMI - Get Report) is another name that looks primed for a dividend hike right now. The $40 billion gas pipeline partner has a history of meaningful dividend hikes, boosting its payouts every quarter in the past 12 months. That makes a boost to Kinder Morgan's 35-cent payout as close to a sure thing as you get in the investment business.
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Dividend investors love Kinder Morgan. KMI is a holding company that owns the general partner and incentive distribution rights for
Kinder Morgan Energy Partners(KMP), an MLP; in other words, it's an investment vehicle that's designed to maximize distribution income for investors. It earns that dividend cash through its ownership of more than 37,000 miles of pipelines and 180 commodity storage terminals spread across the country. By owning the transportation infrastructure that moves commodities, the firm benefits from increased commodity prices (they make producers work less hard to negotiate deals), but it has less exposure than a pure commodity name.
KMI's claim to fame is that it's a traditional corporation rather than a more exotic MLP. That means that the tax consequences of the firm aren't any different than owning any other stock, making it a popular choice for more investors. The El Paso acquisition this year is one big catalyst that should help KMI pay out bigger dividends in the near-term.
I also featured KMI in a list of
Stocsk Hedge Fund Managers Love.