Author Topic: KMI - Kinder Morgan  (Read 128297 times)

muscleman

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Re: KMI - Kinder Morgan
« Reply #290 on: January 13, 2016, 03:57:42 PM »
Yes the disadvantage is that it is not tax-inefficient. In my opinion, they did it to simplify the structure of the company. When everything is combined together, they thought that it would have higher debt rating --> lower interest expense (which is significant given their debts). Another plus point is that when it's simpler, they hoped that it's more attractive for investors and the stock price would increase. This is important because every year they raise money from equity (around 1B if I'm not wrong). I guess Rich Kinder preferred the combined entity.

Ok. So this guy raises 1 Bn per year of equity and pays out 4.5 Bn of dividend? If he is smart, this probably means he pays out a fat dividend to bump up the stock price so he can issue equity at a level much higher than intrinsic value?  :)



benhacker

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Re: KMI - Kinder Morgan
« Reply #291 on: January 13, 2016, 05:10:39 PM »
MM,

You see the news that the div was cut right?  Cut 75%...
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muscleman

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Re: KMI - Kinder Morgan
« Reply #292 on: January 13, 2016, 08:15:09 PM »
MM,

You see the news that the div was cut right?  Cut 75%...

Yeah I am talking about the past before this event. Now that the stock dropped like a stone, he cannot afford to issue equities, so he decided to cut the dividend and use that cash to fund projects. I think that decision makes sense. Does anyone know how much Kinder owns the KMI stock?

Picasso

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Re: KMI - Kinder Morgan
« Reply #293 on: January 13, 2016, 08:45:57 PM »
MM, 99% of your questions can be found with simple google searches and sec filings. Just saying.

muscleman

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Re: KMI - Kinder Morgan
« Reply #294 on: January 13, 2016, 09:48:44 PM »
MM, 99% of your questions can be found with simple google searches and sec filings. Just saying.

Found that info in the DEF 14A. 244,846,090   shares or    11.4   %. Sorry my brain is sometimes short-circuiting after a tedious day of work in Amazon. Sounds like time to leave.  :)

CorpRaider

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Re: KMI - Kinder Morgan
« Reply #295 on: January 14, 2016, 12:30:19 PM »
Yeah I started to put a 10x EV/DCF (I generally buy their DCF numbers) on it but my sphincters locked up on me and I blacked out.  Even a 12x is looking at like a $7.50 zip code.

If one wanted to make a 12x EBITDA based on like DUK, PNY and SO comps, I would listen with baited breath.
« Last Edit: January 14, 2016, 03:04:43 PM by CorpRaider »

frommi

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Re: KMI - Kinder Morgan
« Reply #296 on: January 14, 2016, 09:41:56 PM »
If you look at FCF vs EV shouldn't you add back interest expenses to DCF?

PatientCheetah

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Re: KMI - Kinder Morgan
« Reply #297 on: January 21, 2016, 12:27:42 PM »
any thoughts on today's results? at the cost of slower growth, the fact that KMI is self funding now and prioritizing on maintaining investment grade rating removes the debt downward spiral scenario
« Last Edit: January 21, 2016, 12:29:19 PM by PatientCheetah »
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Palantir

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Re: KMI - Kinder Morgan
« Reply #298 on: January 21, 2016, 12:41:53 PM »
any thoughts on today's results? at the cost of slower growth, the fact that KMI is self funding now and prioritizing on maintaining investment grade rating removes the debt downward spiral scenario
Yeah but it also results in slower growth as you noted.
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roark33

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Re: KMI - Kinder Morgan
« Reply #299 on: January 21, 2016, 12:54:21 PM »
Now that they aren't being valued on a yield basis, people are starting to look at more traditional metrics, and I don't think there are cheap on any of those metrics.  Additionally, counter-party risk is a real issue that they are only slowly starting to disclose.  Coal bankruptcies cut of 65m last Q, wait till the minor E&P players start folding.