Kinder Morgan, Inc. (NYSE: KMI)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0001506307
Market Cap 60.62 Bn
P/B 1.97
P/E 22.23
P/S 3.69
ROIC (Qtr) 5.45
Div Yield % 5.36
Rev 1y % (Qtr) 12.08
Total Debt (Qtr) 32.58 Bn
Debt/Equity (Qtr) 1.06

About

Price action

Investment thesis

Bull case

  • Operating cash flow of 5.74B provides exceptional 54.10x coverage of minority interest expenses 106M, showing strong core operations.
  • Strong operating cash flow of 5.74B provides 7.75x coverage of SG&A expenses 740M, showing efficient operational cost management.
  • Tangible assets of 50.46B provide robust 34.33x coverage of other current liabilities 1.47B, indicating strong asset backing.
  • Operating cash flow of 5.74B provides solid 1.49x coverage of current liabilities 3.85B, showing strong operational health.
  • Operating cash flow of 5.74B fully covers other non-current liabilities 4.94B by 1.16x, showing strong long-term stability.

Bear case

  • Operating cash flow of 5.74B barely covers its investment activities of (3.47B), with a coverage ratio of -1.65, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 71M against inventory of 560M, the 0.13 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 5.74B provides thin coverage of dividend payments of (2.59B) with a -2.21 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 71M provide limited coverage of acquisition spending of (652M), which is -0.11x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 1.44B relative to inventory of 560M (2.58 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Midstream
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ENB Enbridge Inc 100.05 Bn 24.60 2.15 75.15 Bn
2 WMB Williams Companies, Inc. 73.60 Bn 31.09 6.40 27.99 Bn
3 EPD Enterprise Products Partners L.P. 69.94 Bn 12.09 1.32 33.58 Bn
4 KMI Kinder Morgan, Inc. 60.62 Bn 22.23 3.69 32.58 Bn
5 ET Energy Transfer LP 58.05 Bn 13.46 0.73 63.97 Bn
6 TRP Tc Energy Corp 55.97 Bn 22.78 5.27 44.47 Bn
7 MPLX Mplx Lp 54.03 Bn 11.23 4.22 25.92 Bn
8 OKE Oneok Inc /New/ 44.55 Bn 13.34 1.41 33.73 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.29 3.39
EV to Cash from Ops. EV/CFO 16.25 7.77
EV to Debt EV to Debt 2.86 -68.56
EV to EBIT EV/EBIT 17.67 12.77
EV to EBITDA EV/EBITDA 13.51 7.47
EV to Free Cash Flow [EV/FCF] EV/FCF 33.80 13.20
EV to Market Cap EV to Market Cap 1.54 2.49
EV to Revenue EV/Rev 5.68 4.48
Price to Book Value [P/B] P/B 1.97 94.01
Price to Earnings [P/E] P/E 22.23 12.31
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.05 -3.60
Dividend Payout Ratio % Div Payout % (Qtr) 95.30 72.05
Dividend per Basic Share Div per Share (Qtr) 1.16 1.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 93.79 32.66
Interest Coverage Int. cover (Qtr) 2.93 5.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -19.84 -17.97
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -34.26 16,113.89
Dividend Growth (1y) % Div 1y % (Qtr) 2.02 -1.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 3.66 -5.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 2.94 -4.54
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.60 -11.94
EBT Growth (1y) % EBT 1y % (Qtr) 7.29 -230.00
EPS Growth (1y) % EPS 1y % (Qtr) 7.96 -44.55
FCF Growth (1y) % FCF 1y % (Qtr) -30.41 -0.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.14 -1.23
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.23 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.30 0.21
Cash Ratio Cash Ratio (Qtr) 0.02 0.81
Current Ratio Curr Ratio (Qtr) 0.63 1.65
Debt to Equity Ratio Debt/Equity (Qtr) 1.06 1.11
Interest Cover Ratio Int Coverage (Qtr) 2.93 5.11
Times Interest Earned Times Interest Earned (Qtr) 2.93 5.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 46.90 35.86
EBIT Margin % EBIT Margin % (Qtr) 32.12 27.76
EBT Margin % EBT Margin % (Qtr) 21.15 17.28
Gross Margin % Gross Margin % (Qtr) 46.40 48.56
Net Profit Margin % Net Margin % (Qtr) 16.60 15.36