Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a sell with a ratings score of D . The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 195.4% when compared to the same quarter one year ago, falling from $132.00 million to -$126.00 million.
- The debt-to-equity ratio is very high at 2.61 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.33, which clearly demonstrates the inability to cover short-term cash needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, KINDER MORGAN INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- Net operating cash flow has declined marginally to $453.00 million or 7.39% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, KINDER MORGAN INC has marginally lower results.
- This stock has increased by 42.01% over the past year, outperforming the rise in the S&P 500 Index during the same period. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
Kinder Morgan, Inc. owns and operates energy transportation and storage assets in the United States and Canada. The company operates in six segments: Products Pipelines-KMP, Natural Gas Pipelines KMP, CO2 KMP, Terminals KMP, Kinder Morgan Canada KMP, and NGPL PipeCo LLC. The company has a P/E ratio of 76.6, below the average energy industry P/E ratio of 391.4 and above the S&P 500 P/E ratio of 17.7. Kinder Morgan has a market cap of $19.98 billion and is part of the
industry. Shares are up 9.5% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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