Kinder Morgan 101: Knowing Which Kinder Morgan Company Is Right for You

An easy guide to understanding which of Kinder Morgan’s family of companies -- Kinder Morgan Inc., Kinder Morgan Energy Partners, Kinder Morgan Management or El Paso Pipeline Partners -- to invest in.

Jun 17, 2014 at 11:16AM


Source: Kinder Morgan

Investors search for days and months for the perfect opportunity. When we find it we don't want to be bogged down with another set of choices as to how to invest in that opportunity. But that is the very issue facing many investors considering an investment in one of the Kinder Morgan (NYSE:KMI) family of companies. With four ways to invest, including MLPs Kinder Morgan Energy Partners (NYSE:KMP) and El Paso Pipeline Partners (NYSE:EPB), as well as a limited liability company in Kinder Morgan Management (NYSE:KMR), it's tough to choose which option is the best.

Because of this many investors choose to simply pass on Kinder Morgan, tossing the company in the "too hard" pile and missing what could be an exceptional investment opportunity. Other investors choose the wrong Kinder Morgan entity for their situation by adding units of Kinder Morgan Energy Partners when the MLP isn't the best option for their situation as Kinder Morgan Management is the entity that would have made better sense. Then  there is El Paso Pipeline Partners, which is an entity that enables investors to invest in a pure-play opportunity that could be very lucrative over the long term, but is missed because of complexity of the situation.

To help investors make sense of the Kinder Morgan family of companies I created the following slideshow presentation. It's designed to help give a better visual reference of what an investment in each Kinder Morgan company represents. It also details some of the pitfalls and opportunities of investing in MLPs like Kinder Morgan Energy Partners and El Paso Pipeline Partners, as well as why someone would invest in Kinder Morgan Management over Kinder Morgan. 

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Matt DiLallo has the following options: short January 2016 $32.5 puts on Kinder Morgan and long January 2016 $32.5 calls on Kinder Morgan. The Motley Fool recommends El Paso Pipeline Partners and Kinder Morgan. The Motley Fool 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.

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