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Kinder Morgan, Inc. (NYSE: KMI) has long dominated the energy infrastructure sector, with a large network of pipelines and storage/transportation assets. Currently, companies are busy investing in new projects and developing the renewable fuel industry.
In 2022, the stock of the Houston-based midstream company experienced high fluctuations, marked by several ups and downs. It had a positive start to 2023 and traded higher in the early session, but the question is whether the uptrend is sustainable. While KMI’s long-term outlook looks impressive, investors may prefer to wait for next week’s earnings to get a clear picture of its performance this year.
Dividend Power
Meanwhile, the dividend yield is one of the best in the market, which often leads investors to hold the stock for the long term. The company must be able to continue to generate cash for shareholders because its capital allocation plan focuses on continued investment in assets that generate stable cash flow.
Read management/analyst commentary on Kinder Morgan’s Q3 results
Kinder Morgan is betting on stable demand for natural gas transportation and storage to maintain year-on-year growth. Other factors that may cause the company to overcome the effects of high interest rates are the investment in the Energy Transition Ventures business and the strong demand for refined products. Management forecasts net income of $1.12, on a per-share basis, for fiscal 2023. Adjusted EBITDA is seen growing 3% year-over-year to $7.7 billion, while distributable cash flow per share is expected to decrease to $2.13.
Q4 Report on Touch
Kinder Morgan will release its fourth quarter financial results on January 18 at 4:05 PM ET. After generating earnings in the past two quarters, the company looks set to maintain that trend in the final three months of fiscal 2022. According to experts’ consensus estimates, adjusted earnings will rise 11% year over year to $0.30 per share, on revenue of $4.91 billion.
From Kinder Morgan’s Q3 2022 earnings conference call:
“Capacity sales and renewals in our gas business are strong. Gathering and processing are also up against planning and up year-over-year. The existing capacity is increasing in the natural gas network and we see it in our network in the main interstate system and system intrastate Texas. And we’re looking at the storage and transportation service offerings and we’re even looking at the system that was previously challenged, the Midcontinent Express Pipeline.
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Net profit, on an adjusted basis, rose to $0.25 per share in the September quarter from $0.22 per share a year earlier. All operating segments, except Products Pipelines, registered positive EBDA, and there was a 35% growth in profits to $5.18 billion. Distributable cash flow per share, an important measure of financial health, rose 11%.
Shares of Kinder Morgan traded up 1% on Thursday afternoon, after gaining about 14% over the past six months.
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