Kinder Morgan Holds Steady After IPO

NEW YORK ( TheStreet) -- Shares of pipeline transportation and energy storage company Kinder Morgan ( KMI) have been ticking lower since its first-day closing price, but remains above its initial public offering price of $30.

Shares of the company were flat at $30.93 during afternoon trading.

"As new issues trade, there's a lot of dancing and courting by investors and the company," said financial modeling and valuation expert Scott Rostan, a principal and founder of training at Training The Street and Merrill Lynch alum. "There's a natural ebb and flow that often happens."

Rostan added that the weakness can also be attributable to a healthy run-up in the market in general -- and profit taking. That the stock continues to trade above its offering price is a good sign, he noted.

Kinder Morgan made its debut as one of the hottest IPOs so far this year. Last Friday, the day after its price offering was announced, shares of the company ended the trading session at $31.05, up 3.5%.

Morningstar analyst Jason Stevens noted in a report that he thinks Kinder Morgan will be able to raise dividend payments by nearly 11% annually, from the annualized $1.16 figure Morningstar expects for 2011. The analyst is impressed with Kinder Morgan's assets, which he describes as "attractive, consistent cash-flow generators."

Last Thursday, the company said its initial public offering of 95.5 million shares was priced at $30 -- above the expected range.

The company had expected to offer 80 million shares.

In total, the company raised $2.9 billion from the IPO.

If overallotments are exercised, the deal could raise up to $3.3 billion, making Kinder Morgan's IPO the largest energy IPO of the decade and the largest IPO this year, Stevens noted in his report.

All of the common stock being sold was being sold by existing investors. Kinder Morgan would not receive any proceeds from the offering. Kinder Morgan owners included private-equity groups Carlyle Group, Riverstone Holdings, Highstar Capital and Goldman Sachs ( GS) funds.

On Monday, Chinese casual menswear fashion company Zuoan ( ZA) priced its offering, and it wasn't quite as hot as Kinder Morgan's. The offering price of $7 a share for 6 million American depositary shares was lower than the previously expected offering price of $10.50 to $12.50 a share.

Shares of the company were up 0.3% to $7.06 during afternoon trading Wednesday.

Rostan said while there's been concern about a bubble for China and social-media related investments, "as the balloon is expanding, you can be a very successful investor and get very good returns."

>>Search for Highest Dividends by Rate or Yield
More on Earnings
Today's Top Earnings
Earnings Calendar

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

>To follow the writer on Twitter, go to Andrea Tse.

>To submit a news tip, send an email to: tips@thestreet.com.

Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

More from Stocks

S&P 500 Sets Intraday Record High, Dow Trades Higher for a Fourth Day

S&P 500 Sets Intraday Record High, Dow Trades Higher for a Fourth Day

Tesla: One Stock Chart That Says It All

Tesla: One Stock Chart That Says It All

Jim Cramer Reacts to Apple's Price Target Raise at Bank of America Merrill Lynch

Jim Cramer Reacts to Apple's Price Target Raise at Bank of America Merrill Lynch

Jim Cramer: Kohl's Is a Buy

Jim Cramer: Kohl's Is a Buy

Blackstone's Byron Wien: Why The Bull Market Is Not Over

Blackstone's Byron Wien: Why The Bull Market Is Not Over