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TheStreet Open House

Why Kinder Morgan Energy Partners (KMP) Stock Is Up Today

NEW YORK (TheStreet) -- Shares of Kinder Morgan Energy Partners  (KMP) are up 1.10% to $79.81 after it announced an expanded contract with General Dynamics-NASSCO (GD) on Monday.

The deal involves the design and construction of an additional 50,000 deadweight ton LNG-conversion-ready product tankers for its growing fleet.

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Construction is scheduled to begin in the fourth quarter of 2015 with delivery slated for the second quarter of 2017. 

TheStreet Ratings team rates KINDER MORGAN ENERGY -LP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate KINDER MORGAN ENERGY -LP (KMP) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 37.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $1,074.00 million or 43.96% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.38%.
  • 40.55% is the gross profit margin for KINDER MORGAN ENERGY -LP which we consider to be strong. Regardless of KMP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, KMP's net profit margin of 20.42% significantly outperformed against the industry.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 4.7% when compared to the same quarter one year ago, dropping from $783.00 million to $746.00 million.
  • KINDER MORGAN ENERGY -LP's earnings per share declined by 30.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KINDER MORGAN ENERGY -LP increased its bottom line by earning $3.80 versus $1.64 in the prior year. For the next year, the market is expecting a contraction of 30.9% in earnings ($2.63 versus $3.80).
  • You can view the full analysis from the report here: KMP Ratings Report
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