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Kinder Morgan, Inc. (KMI)

Company Dividend Discount ModelIndustry: Oil & Gas MidstreamSector: Energy

Valuation Snapshot

Stable Growth$11.88 - $18.43$14.91
Multi-Stage$17.41 - $19.01$18.20
Blended Fair Value$16.55
Current Price$28.31
Upside-41.53%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS3.40%3.81%1.151.141.131.101.060.970.730.500.501.90
YoY Growth--1.11%1.00%2.50%3.43%9.20%33.68%44.46%0.18%-73.53%140.00%
Dividend Yield--4.03%6.18%6.44%5.81%6.38%6.99%3.63%3.35%2.31%10.64%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,727.00
(-) Cash Dividends Paid (M)2,592.00
(=) Cash Retained (M)135.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)545.40340.88204.53
Cash Retained (M)135.00135.00135.00
(-) Cash Required (M)-545.40-340.88-204.53
(=) Excess Retained (M)-410.40-205.88-69.53
(/) Shares Outstanding (M)2,222.002,222.002,222.00
(=) Excess Retained per Share-0.18-0.09-0.03
LTM Dividend per Share1.171.171.17
(+) Excess Retained per Share-0.18-0.09-0.03
(=) Adjusted Dividend0.981.071.14
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate0.75%1.75%2.75%
Fair Value$11.88$14.91$18.43
Upside / Downside-58.04%-47.33%-34.89%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,727.002,774.772,823.372,872.832,923.152,974.353,063.58
Payout Ratio95.05%94.04%93.03%92.02%91.01%90.00%92.50%
Projected Dividends (M)2,592.002,609.382,626.572,643.572,660.352,676.922,833.81

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate0.75%1.75%2.75%
Year 1 PV (M)2,368.662,392.172,415.68
Year 2 PV (M)2,164.322,207.492,251.10
Year 3 PV (M)1,977.372,036.832,097.48
Year 4 PV (M)1,806.351,879.141,954.11
Year 5 PV (M)1,649.921,733.441,820.31
PV of Terminal Value (M)28,727.3430,181.5831,694.12
Equity Value (M)38,693.9640,430.6642,232.79
Shares Outstanding (M)2,222.002,222.002,222.00
Fair Value$17.41$18.20$19.01
Upside / Downside-38.49%-35.73%-32.86%

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