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Why Jim Cramer Says Buy Kinder Morgan (KMI) Stock

Stocks in this article: KMI KMP KMR EPB

NEW YORK (TheStreet) -- TheStreet's Jim Cramer says Rich Kinder listened to those who said the cost of capital was too high for Kinder Morgan Energy Partners  (KMP) and he bought KMP in what Cramer calls "an incredible transaction."

Now, Kinder Morgan  (KMI) will be in charge, and Cramer says it could become the third-biggest U.S. oil company with a $2 dividend starting in 2015. Cramer says people are selling off the stock off an arbitrage basis, but he would buy it because he thinks its going to be a "remarkable" company.

Cramer says Kinder takes $1 a year, has never sold stock in his different entities and has bought stock in the open market. Kinder has repeatedly said he would make investors a lot of money, and Cramer says he made people a fortune.

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Cramer points to a report from last year that said the stock would be cut in half, but Cramer doesn't think KMP can be cut in half because it's going away at a much higher price.

TheStreet Ratings team also rates Kinder Morgan as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate KINDER MORGAN INC (KMI) a BUY. This is driven by multiple strengths, 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, expanding profit margins, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

You can view the full analysis from the report here: KMI Ratings Report

Must Read: Cramer: Kinder's Triumph

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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