Here are some of the main points of the report and some guidelines about whether the return is high or not Profit shares It is worth buying now.
Kindr Morgan’s modified arrow profits (EPS) increased by 7 % in 2024. The company achieved a less free cash flow (FCF) in 2024 compared to 2023, but it was still able to finance the expenses of profit distributions completely through FCF though The capital increases by 13.5 %. Expenditures (capital expenses).
The capital expenditures of Kinder Morgan have reached its highest level in five years, as the company is working to increase spending on long -term projects. The business model is somewhat clear and direct. Kinder Morgan build pipelines, terminal stations, storage facilities, etc. with heavy capital, then impose fees on its customers to use this infrastructure. It is a strategy similar to the fees, which costs a lot of money in advance but generates future cash flows throughout the productive life of the original.
Kinder Morgan’s rise in 2024 was not due to its decent profit growth. Rather, this was due to the change of concepts about their current origins and the growth of future projects.
Despite the significant increase in last year, Kinder Morgan is still 26% low over the past decade. The company was suffering from excessive borrowing and crushing due to the decline in oil and gas prices in 2014 and 2015, which led to a reduction in its profits to support the capital.
In the aftermath of the economic crisis, Kinder Morgan tightened its spending and focused on rebuilding the company based on its projects that won the highest percentage of condemnation. Kinder Morgan gradually increased her profits, but she remained unknown because investors questioned the long -term value of oil and gas assets. Ultimately, if the demand for oil and gas is expected to decrease gradually, the value of the current assets of Kinder Morgan can also decrease. There will be no good reason to justify the construction of new projects.
But the significant increase in oil and gas production in the United States, especially from the Bermean Basin in West Texas and East New Mexico, raised a greater need to increase the ability to transport hydrocarbon materials out of the region. The prosperity witnessed by US exports of LNG was the cause of the expansion of the American gas market – which paved the way to the United States to become a clear source of oil and gas, and thus increased demand for energy infrastructure.
Then came the last catalyst: artificial intelligence. Data centers are needed to support the complex and powerful artificial intelligence workflow. Kinder Morgan strongly believes that natural gas will be crucial in providing reliable energy for a growing American network.
Therefore, even if the American energy mix includes more solar energy and wind energy over time, the demand for natural gas may continue to increase due to the high demand for energy.
Kim Dang, CEO of Kinder Morgan, said the following in response to the question of one of the analysts about the profit call about the new American administration that pays the artificial intelligence infrastructure with an announced investment of $ 500 billion:
I think we are early, as you know, in the direction of the data center, and the strength that will be needed there. Thus, you know, I think the encouragement that this administration provided to develop the data center … I think their desire to see American energy is working well, all playing a good long -term direction to demand for natural gas.
However, Dang said it is expected that only three billion cubic feet of power will contribute to the expected increase of 28 billion cubic feet per day in the demand for natural gas from now until 2030. In other words, Kinder Morgan can benefit from artificial intelligence. The demand for energy is paid, but it does not depend on being the main driver of its average growth.
For 2025, Kinder Morgan expects $ 2.8 billion in net income and a modified stock revenue of $ 1.27, an increase of 10 % over 2024. Its profit is expected by $ 2 % and paid $ 1.17 per share in 2025 profits – a large part of its profits.
Kinder Morgan has made very slight increases in stock profits in recent years, which is not a great sign. But this may be a smart step so that the company still has a surplus capital to re -invest in business and grow growth. Moreover, Kinder Morgan has already achieved a powerful return of 3.7 %. So there is no great need to achieve significant increases in profits.
The company expects to end in 2025 with a net debt rate to modified profits before interest, taxes, depreciation and firefighting (EBITDA) of 3.8. In 2024 it has ended with a debt rate of 4 and has a targeted range of long -term financial leverages ranging from 3.5 to 4.5.
Due to the weak Kinder Morgan registry in the financial leverage management, it is encouraging to see the company continues to give priority to financial health and not over spending.
The percentage to the profits per share is 24.2, based on the share price at the time of this writing and the amended arrow profit guidance for the year 2025, amounting to $ 1.27. So it is not an incomplete arrow in no way, which is logical, given that the stock price gains in 2024 exceeded the growth of profits. But since Kinder Morgan was very cheap with the approaching last year, the evaluation is still reasonable.
In the past years, Kinder Morgan has been a favorite stock. Now, it has returned to its interest due to the renewal of power in the oil and gas sector, the potential grace of the demand for energy -based energy, and the administration that supports increased oil and gas production.
Kinder Morgan is a decent but not screaming now. It was customary to be a high -return arrow, but now the return has become the same Exxon MobilAnd less than ChevronThe return 4.2% may want investors looking for basic property in the oil and gas industry to think about Exxonmobil or Chevron instead of Kinder Morgan at the present time.
Another alternative is low -cost investment funds (ETF) like Vanguard Energy FundWhere she loves companies such as Exxonmobil, Chevron, and Kinder Morgan and other companies in the middle of the road Williams companies and Onok It is five of the 10 largest possessions.
Before you buy shares in Kinder Morgan, consider the following:
the Motley Adviser is a lie The team of analysts just identified what they think Top 10 shares Investors now buy it … Kind Morgan was not one of them. The ten shares that have achieved this reduction can achieve huge returns in the coming years.
Think when Nafidia I prepared this list on April 15, 2005 … if you invest $ 1,000 at the time of our recommendation, You will have 874.051 dollars!*
Now, it is worth noting Stock consultantThe total average return is 937% – Excellence in the market compared to 178% For the S&P 500 index. Don’t miss the latest top ten list.
Learn more “
*The stock consultant returns from January 21, 2025
Daniel Volber He has no position in any of the mentioned stocks. The Motley Fool has positions at Chevron and Kinder Morgan. The Motley Fool recommends oneok. The Motley Fool has Disclosure.
Kinder Morgan expects growth to continue in 2025, but is it possible to buy high -yield shares now? It was originally published by The Motley Fool
