BofA Equity Research:
KMI reported 4Q20 earnings which beat consensus estimates. During the earnings call, management set the stage for its upcoming Investor Day on Wednesday, 27 January. At the Investor Day, we anticipate KMI to discuss 2021 guidance assumptions, release 2021 segment guidance and discuss ESG/energy transition opportunities, amongst other topics.
KMI for High Yield and Growth - Jan 26
KMI for High Yield and Growth - Jan 26
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: KMI for High Yield and Growth - Jan 26
Kinder Morgan, Inc. (KMI, $14.82, Buy; Target $17.00)
KMI 2021 Investor Day Overview - Selman Akyol at Stifel
We attended Kinder Morgan's 2021 Virtual Investor Day and would characterize the tone as relatively positive. While KMI acknowledges a transition in energy, they believe hydrocarbons, specifically natural gas, will play a significant role in the global energy mix for decades to come. Given KMI's cash flows are underpinned by natural gas, we view the company's cash flows as relatively secure longer-term. KMI is currently exploring ways it can participate in the energy transition. KMI believes renewable diesel will present the most opportunities and identified $90 million of potential West Coast projects. Kinder is also exploring opportunities in CO2, RNG and hydrogen. While 2021 EBITDA is expected to be slightly lower YoY, FCF after dividends is projected to increase which we view favorably. At this time, we are maintaining our Buy rating and our $17.00 target price.
KMI 2021 Investor Day Overview - Selman Akyol at Stifel
We attended Kinder Morgan's 2021 Virtual Investor Day and would characterize the tone as relatively positive. While KMI acknowledges a transition in energy, they believe hydrocarbons, specifically natural gas, will play a significant role in the global energy mix for decades to come. Given KMI's cash flows are underpinned by natural gas, we view the company's cash flows as relatively secure longer-term. KMI is currently exploring ways it can participate in the energy transition. KMI believes renewable diesel will present the most opportunities and identified $90 million of potential West Coast projects. Kinder is also exploring opportunities in CO2, RNG and hydrogen. While 2021 EBITDA is expected to be slightly lower YoY, FCF after dividends is projected to increase which we view favorably. At this time, we are maintaining our Buy rating and our $17.00 target price.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: KMI for High Yield and Growth - Jan 26
I have updated my forecast/valuation model for KMI based on their 2021 guidance. This is a very large mid-stream company that has a lot of analysts covering it. Since they announced Q4 2020 results and provided guidance for 2021 I've seen four updated price targets that range from $15.00 to $19.00 per share. My valuation "magically" comes to $17.00.
KMI is currently trading for $14.46.
They announced that their dividends will increase ~3% this year to $1.08, so the annual yield is ~7.4%. Per KMI's guidance, DCF should be ~$1.94/share this year.
KMI has a super strong balance sheet and more than enough DCF coverage to pay the dividends. Plus, they have a share buyback in place that adds another layer of safety.
KMI's Investor Day slides are outstanding. You should go to their website and page thru the slides. They open with a very educational multi-decade view of what future energy supply and demand should be in the post-pandemic world. I'm going to use several of their slides in my Monday webinar presentation.
If you'd like to attend the webinar on Feb. 1 you must register. Send a note to Sabrina at energyprospectus@gmail.com and she will send you the registration link.
KMI is currently trading for $14.46.
They announced that their dividends will increase ~3% this year to $1.08, so the annual yield is ~7.4%. Per KMI's guidance, DCF should be ~$1.94/share this year.
KMI has a super strong balance sheet and more than enough DCF coverage to pay the dividends. Plus, they have a share buyback in place that adds another layer of safety.
KMI's Investor Day slides are outstanding. You should go to their website and page thru the slides. They open with a very educational multi-decade view of what future energy supply and demand should be in the post-pandemic world. I'm going to use several of their slides in my Monday webinar presentation.
If you'd like to attend the webinar on Feb. 1 you must register. Send a note to Sabrina at energyprospectus@gmail.com and she will send you the registration link.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group