Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Kinder Morgan, Inc. (NYSE:KMI) fit the bill? Let's take a look at what its recent results tell us about its potential for future gains.

What we're looking for
The graphs you're about to see tell Kinder Morgan's story, and we'll be grading the quality of that story in several ways:

  • Growth: Are profits, margins, and free cash flow all increasing?
  • Valuation: Is share price growing in line with earnings per share?
  • Opportunities: Is return on equity increasing while debt to equity declines?
  • Dividends: Are dividends consistently growing in a sustainable way?

What the numbers tell you
Now, let's take a look at Kinder Morgan's key statistics:

KMI Total Return Price Chart

KMI Total Return Price data by YCharts.

Passing Criteria

3-Year* Change

Grade

Revenue growth > 30%

71.8%

Pass

Improving profit margin

1796%

Pass

Free cash flow growth > Net income growth

(23.3%) vs. 2,988.6%

Fail

Improving EPS

55.4%

Pass

Stock growth (+ 15%) < EPS growth

13.1% vs. 55.4%

Pass

Source: YCharts. * Period begins at end of Q4 2010.

KMI Return on Equity (TTM) Chart

KMI Return on Equity (TTM) data by YCharts.

Passing Criteria

3-Year* Change

Grade

Improving return on equity

902.7%

Pass

Declining debt to equity

(40.1%)

Pass

Dividend growth > 25%

192.9%

Pass

Free cash flow payout ratio < 50%

476.8%

Fail

Source: YCharts. * Period begins at end of Q4 2010.

How we got here and where we're going
Kinder Morgan puts together a strong performance by earning seven out of nine possible passing grades. The company missed on one important metric that investor look for -- free cash flow -- which has been falling since 2012, and since Kinder Morgan's committed to high dividends, it's wound up paying out more as a percentage of free cash flow with each successive quarter, costing it another failing grade on this test. On balance, this is still an excellent showing, but will Kinder Morgan continue to outperform in the future? Let's dig a little deeper to find out.

Fool contributor Justin Loiseau notes that Kinder Morgan continues to explore various new investment opportunities, including an increased focus on energy-by-rail rail transport through its MLP spinoff Kinder Morgan Energy Partners (NYSE:KMP). Fool contributor Reuben Brewer also notes that advanced oil-extraction techniques in the U.S. have been a boon for Kinder Morgan, which plans to invest around $13.5 billion into the expansion of pipelines and terminals business over the next few years to handle the surge in domestic oil production. About $3.6 billion of this total will be spent this year, and about 10% of that will go toward a petroleum condensate processing facility with a total capacity of 100,000 barrels per day. This project that should be operational any day now, with full operational capacity slated for next year. Fool contributor Bob Ciura points out that the company will operate this facility under a long-term fee-based contract with BP (NYSE:BP) North America, which will keep it generating steady revenue for years to come. One of Kinder Morgan's long-term projects -- the Elba Liquefaction and Express Compression expansion -- will add significant liquefaction and export capabilities to an existing liquefied natural gas terminal in Georgia.

Kinder Morgan recently filed an application with the National Energy Board to double up its existing oil pipeline from Alberta to British Columbia. Should Kinder Morgan complete this project, total capacity will increase from 300,000 to 890,000 barrels per day However, Canada's aboriginal First Nations people, alongside various British Columbian and Albertan environmental groups, have pushed back against the proposed pipeline, over fears that it would cause serious environmental damage to the land and waterways.

Putting the pieces together
Today, Kinder Morgan has many of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy -- or to stay away from a stock that's going nowhere.

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Alex Planes has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Kinder Morgan. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.