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3 Reasons to Hold On to This Pipeline Giant's Stock

The Kinder Morgan family of companies is an energy pipeline giant made up of four publicly traded securities:

  • Kinder Morgan, (NYSE: KMI  ) , a typical "C"-type company that owns the general partner stake in the group.
  • Kinder Morgan Energy Partners (NYSE: KMP  ) and El Paso Pipeline Partners (NYSE: EPB  ) , publicly traded limited partner units that own and operate much of the pipeline infrastructure controlled by the group.
  • Kinder Morgan Management (NYSE: KMR  ) , a publicly traded limited liability company responsible for managing the group.

In the video below, portfolio manager Chuck Saletta explains the three reasons why he's happy to hold on to the shares of Kinder Morgan bought for the real-money Inflation-Protected Income Growth portfolio.

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Graphic showing how the four parts of Kinder Morgan fit together:

Source: Kinder Morgan investor presentation dated May 22, 2014. Full-size image on slide 3.

And here are the debt-to-equity ratios for the four different stock-like securities in the Kinder Morgan family

Company Debt to Equity Ratio
Kinder Morgan, Inc 1.3
Kinder Morgan Energy Partners 1.3
El Paso Pipeline Partners 2.1
Kinder Morgan Management 0.0

To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck's article feed by clicking here. To join The Motley Fool's free discussion board dedicated to the iPIG portfolio, click here. To see the iPIG portfolio's online tracking spreadsheet, click here.

Read/Post Comments (5) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 27, 2014, at 8:45 PM, wandern16 wrote:

    Thanks for the update, Chuck. I am not a video fan, per se, but I enjoy yours b/c they are short and sweet and not overly weighted w/ too many words.

  • Report this Comment On May 27, 2014, at 9:39 PM, TMFBigFrog wrote:

    Thanks, wandern16!

    That's very kind of you to say. The videos are an art form that are a lot harder to master than I originally thought they would be.

    I don't consider myself anywhere near an expert at them, and a ton of credit goes to the incredibly patient coaches at the Fool. When videos started, I warned them about my face for radio and voice for print, and they responded by investing a ton of time helping with voice, posture, and expression coaching. If you find my videos bearable, those coaches deserve the credit, along with the editors that can do remarkable tricks with video these days...

    Best regards,


    Inside Value Home Fool

    Disclosure: I own shares of Kinder Morgan and of Kinder Morgan Management.

  • Report this Comment On May 29, 2014, at 9:13 AM, SCDividends wrote:

    Chuck you said "Kinder Morgan Management (NYSE: KMR ) , a publicly traded limited liability company responsible for managing the group."

    KMR is a "brother" of KMP and the only difference is KMR gives it Dividend in Shares of KMR. Perhaps you may want to alter your statement?



  • Report this Comment On May 29, 2014, at 8:10 PM, TMFBigFrog wrote:

    Hi Dave,

    KMR's investors are rewarded based on KMP's performance, but from an operating perspective, KMR describes its business as managing KMP. The description from it's most recent 10-Q follows:

    "Kinder Morgan Management, LLC is a publicly traded Delaware LLC that was formed on February 14, 2001. KMGP, which is indirectly wholly owned by KMI, is the general partner of KMP and owns all of our voting shares. KMGP, pursuant to a delegation of control agreement among us, KMGP and KMP, has delegated to us, to the fullest extent permitted under Delaware law and KMP’s limited partnership agreement, all of its rights and powers to manage and control the business and affairs of KMP, subject to KMGP’s right to approve specified actions. "

    Source: .

    Best regards,


    Inside Value Home Fool

    Disclosure: I own shares of KMI and KMR

  • Report this Comment On June 12, 2014, at 1:25 PM, Heidikitty wrote:

    This company always confuses me but I have KMP and very little KMI. Question is for growth and collecting dividends 4/5 years from now which one KMP or KMI

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Chuck Saletta

Chuck Saletta has been a regular Fool contributor since 2004. His investing style has been inspired by Benjamin Graham's Value Investing strategy. Chuck also can be found on the "Inside Value" discussion boards as a Home Fool.

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