After several challenging years, Kinder Morgan (KMI -0.32%) restarted its growth engine in 2018 as its cash flow per share rebounded 6%. The energy infrastructure giant expects to continue revving up this year, with cash flow per share on track to increase by 4%, even though it sold a large pipeline at the end of last year.

That upward trajectory should continue since the pipeline giant has added even more projects to its expansion backlog. Because of that, Kinder Morgan should be able to keep growing its dividend in the coming years. 

A man holding out his hand with the word dividends above and an arrow sloping upward.

Image source: Getty Images.

Well-fueled in the near term

Kinder Morgan began this year with a backlog of $5.7 billion in expansion projects, including $3.9 billion of investments focused on expanding its natural gas infrastructure empire. Those gas-related projects alone should supply the company with roughly $725 million of incremental annual income as they come online through 2022, boosting that segment's earnings by 14%.

Given its visible growth prospects and improving financial profile, Kinder Morgan continues to believe it can increase its 5%-yielding dividend by another 25% next year. Even with that higher level, the company will pay out less than 55% of its cash flow, which is one of the lowest percentages in the pipeline sector. That will leave the company with plenty of excess cash to continue investing in expansion projects.

Keeping the tank well-fueled for 2020 and beyond

Kinder Morgan has been working hard to lock up new projects so that it can keep growing at a healthy rate in the coming years. While the company ended the second quarter with the same backlog level as it had at the start of the year, there's a lot more to the story. That's because the company has completed or removed nearly $1 billion of projects from the backlog during the first six months of 2019.

Meanwhile, it also approved roughly the same value in new expansions. In doing so, the company has enhanced its growth outlook while extending the visibility into 2023.

The company has continued adding new projects to its backlog during the third quarter. It recently approved $170 million of expansion projects to enhance the capabilities of its Houston Ship Channel facilities. Kinder Morgan expects to finish $125 million of those projects by the second quarter of 2020 and the other $45 million by the fourth quarter of next year.

The company has secured long-term contracts with customers to support these projects, which means they'll provide it with steady cash flow once they come online. While smaller expansion projects like those don't make headlines, they do help move the needle since they typically generate very high returns on investment.

A pipeline under construction.

Image source: Getty Images.

A vast reservoir of future fuel sources

Kinder Morgan also has several other expansion projects in development. One potentially needle-moving near-term opportunity is a joint venture with Tallgrass Energy (TGE) to boost oil transportation capacity out of the Rockies. Tallgrass would contribute its Pony Express Pipeline, while Kinder Morgan would convert two underutilized gas lines to oil service.

If Kinder Morgan and Tallgrass Energy secure enough customers to move forward with that project, it could enable both to approve other expansions. Kinder Morgan, for example, could boost the capacity of its Double H Pipeline, which would feed into the expanded Pony Express system. Meanwhile, Tallgrass has proposed building an oil pipeline to a new export facility along the coast of Louisiana.

Kinder Morgan is also working on a potential third large-scale gas pipeline out of the Permian Basin called Permian Pass. On top of that, it's slowly moving forward with its second liquefied natural gas (LNG) export facility, Gulf LNG. The company also sees opportunities to expand its footprint in Louisiana's Haynesville shale to support that region's production growth. Meanwhile, it's exploring ways to help distribute all the gas flowing into the Gulf Coast region.

Plenty of fuel to keep growing the dividend

Kinder Morgan has already said it would boost its investor payout by 25% next year, which is part of a three-year reset. Meanwhile, with all the growth projects it has coming down the pipeline, Kinder Morgan should be able to keep growing the dividend in the coming years.

While it likely won't boost its payout at quite as fast a pace, the company should be able to deliver healthy dividend growth after next year. That steadily rising income stream is what makes Kinder Morgan a perfect stock for retirees.