Invest Better With Kinder Morgan

Worldwide Invest Better Day 9/25/2012

The Motley Fool has helped ordinary people become better investors for nearly two decades. This month, we're reaching out to millions of investors to help guide them in their quest toward financial knowledge and independence.

Along those lines, I'm planning to take a look at a few of the most popular midstream stocks in the market today. The midstream industry is growing at a rapid clip, and there are many potential investments to choose from. Today, I'd like to focus on Kinder Morgan (NYSE: KMI  ) .

Why buy Kinder Morgan?
For beginning investors, Kinder Morgan presents a great way to take advantage of the booming midstream industry, without messing with the extra paperwork that comes with owning a master limited partnership. Instead, Kinder Morgan holds the general partner stake in its MLP, Kinder Morgan Energy Partners (NYSE: KMP  ) .

By market cap, Kinder Morgan is the second-largest American midstream outfit, behind only Enterprise Products Partners (NYSE: EPD  ) . It controls 75,000 miles of pipeline and 180 terminals, and by enterprise value is actually the third-largest energy company in North America.

In many ways, Kinder Morgan is at the top of the midstream heap. It operates the largest natural gas network in the U.S., with assets in every major natural gas play. It is the largest independent terminal operator in the States as well. It is the largest independent transporter of petroleum products and carbon dioxide. And, despite the fact that pipelines and terminals are its bread and butter, Kinder Morgan is also the second-largest oil producer in the state of Texas. Clearly, this is a company worth investigating further.

Perhaps more impressive than its dominant asset footprint, is the company's insistence on putting shareholders first. In presentation after presentation, Kinder Morgan stresses its careful stewardship of shareholder funds. The company's CEO, Richard Kinder, runs a tight and frugal ship. Accepting an annual salary of $1, Kinder is not about gimmicks, but rather he is simply eager to prove his unwavering commitment to his shareholders.

Year to date, Kinder Morgan is up just shy of 10%, and while that isn't quite enough to outperform the S&P right now, it's still a very solid return. The company is currently sporting a 3.9% yield and an annualized dividend of $1.40 per share.

Learn more
With its major acquisition of El Paso more or less wrapped up, Kinder Morgan is a force to be reckoned with in the midstream world. To learn more about the future of Kinder Morgan, use this link to the company's investor page and keep up with the Fool's coverage of the MLP using our My Watchlist feature.

Stay tuned to the Fool all month for other informative articles covering a wide range of investing topics. On Sept. 25, we're taking a day to celebrate the art of investing and we encourage your participation. Take a look at InvestBetterDay.com now and get started on the path to personal prosperity.

Fool contributor Aimee Duffy holds no position in any company mentioned. Click here to see her holdings and a short bio. If you have the energy, check out what she's keeping an eye on by following her on Twitter, where she goes by @TMFDuffy.

Motley Fool newsletter services have recommended buying shares of Enterprise Products Partners and Kinder Morgan. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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