| Can a Bigger Kinder Morgan (KMI) Counter Price Volatility? | |
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On Dec 31, 2015, we issued an updated research report on leading oilfield services company, Kinder Morgan Inc. KMI.
The recent reorganization of Kinder Morgan companies into a single entity created the largest midstream company in North America. This is facilitating access to additional projects and leading to accelerated growth. We believe the size advantage is bringing the company opportunities to build smaller adjacent pipelines at a lower cost than peers. Further, increased demand for power generation and exports is expected to drive up infrastructure build-out for the company.
Kinder Morgan has identified growth opportunities worth $17.6 billion over the next five years of which $2.6 billion was allocated for 2015. The company continues to prove that it is capable of utilizing its extensive presence to boost domestic production, price differentials and shifting demand. With four of its five segments scheduled to receive over $500 million in capital, the company is poised for growth in the near future.
In North America, Kinder Morgan is the largest energy infrastructure company with an enterprise value of over $130 billion. It owns an interest in or operates approximately 84,000 miles of pipelines and 165 terminals. Kinder Morgan's network connects its pipelines in the Rocky Mountains, the Midwest and Texas with El Paso's extensive network spreading east from the Gulf Coast to New England, and west through New Mexico, Arizona, Nevada and California. Hence, the asset mix will eventually boost the company’s natural gas pipeline exposure.
Kinder Morgan is currently the largest natural gas pipeline operator in North America. As a result the company’s results are vulnerable to the weak gas price scenario.
Moreover, Kinder Morgan is undergoing numerous large scale projects that could face setbacks or opposition and in turn cause delay in cash flows realizations. In this respect, it is noteworthy to mention the Trans Mountain pipeline expansion in Canada, which has already been deferred by nine months due to local opposition and Canadian regulation. The project is expected to cost $5.4 billion, signifying about 30% of Kinder Morgan’s project backlog. Any further delay in the project will adversely impact the company’s earnings and long-term growth.
We believe gas infrastructure opportunities will be limited in the near to medium term, given low basis differentials and reduced dry gas drilling. The only positive we see for natural gas infrastructure is the Marcellus shale development.
Zacks Rank and Stocks to Consider
Kinder Morgan carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Energy Transfer Equity, L.P. ETE, ReneSola Ltd. SOL and Boardwalk Pipeline Partners, LP BWP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RENESOLA LT-ADR (SOL): Free Stock Analysis Report ENERGY TRAN EQT (ETE): Free Stock Analysis Report BOARDWALK PIPLN (BWP): Free Stock Analysis Report KINDER MORGAN (KMI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Kinder Morgan
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CODE : KMP |
ISIN : US4945501066 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Kinder Morgan is a producing company based in United states of america. Kinder Morgan is listed in Germany and in United States of America. Its market capitalisation is US$ 46.0 billions as of today (€ 36.7 billions). Its stock quote reached its lowest recent point on June 25, 1999 at US$ 10.00, and its highest recent level on November 26, 2014 at US$ 102.03. Kinder Morgan has 450 600 000 shares outstanding. |