The energy sector is an area I’ve largely avoided for quite some time, and investors have suggested doing the same (except for energy transport / pipeline companies, of course).
That said, like everything else in life, there are always exceptions to the rules. This article describes a Canadian-focused energy play with juicy dividends for aggressive dividend investors.
Kinder Morgan (NYSE: KMI) is the US parent company of the Kinder Morgan Empire, and Kinder Morgan Canada is listed separately on Canada. The company currently has a dividend yield of 7.2% at the time of writing. This is an incredibly juicy yield given the company’s reasonable payout ratio and stable position in the market.
The company is probably one of the most desirable upstream and downstream value propositions of its peers, with a decent payout ratio and a much better-looking balance compared to its heavily hit sector peers. It has a seat.
Commodity prices continue to rise, and in an environment of rising commodity prices, we could see Kinder Morgan’s share price rise significantly. This means that dividend investors may need to act swiftly to fix this dividend yield.
There is no reason to expect a dividend cut in the short term, but we believe it is likely that dividend increases will resume in the medium term and are likely to be underestimated at this level.
Invest wisely, my friends.
Why Kinder Morgan is an Interesting Dividend Choice Today
http://www.baystreet.ca/articles/dividends.aspx?id=635 Why Kinder Morgan is an Interesting Dividend Choice Today