Last month, something amazing happened. Over the course of the first two rounds of The Motley Fool's inaugural Stock Madness 2005 contest, a dividend-paying pipeline company beat first one of the greatest growth-story stocks of the '90s, and then one of the world's strongest consumer products goliaths.

In its first match, Kinder Morgan (NYSE:KMI) faced off against and defeatedStarbucks (NASDAQ:SBUX). Next, Kinder Morgan beat Motley Fool Inside Value pick Colgate-Palmolive (NYSE:CL). In the end, it was felled only after encountering that most popular of profitless wonder-stocks, Sirius Satellite (NASDAQ:SIRI).

That Kinder Morgan survived even Round 1, though, says something about the strength of this business, the attraction of its steady performance, and the ability of its consistent -- and rising -- dividends to overcome even the addictive power of the Caffeine King in investors' minds.

Yesterday, the Foolish voters who cast their lot with Kinder Morgan were vindicated, as the company proved them right once again. In an after-close earnings release, Kinder Morgan announced a 15% increase in Q1 2005 profits in comparison with the first quarter of 2004. Even better, the company boosted its annual dividend by 24%. At $2.80 per share, the company's stock currently sports a 3.8% yield -- nearly twice the market average.

Funding for that dividend came, as usual, primarily from Kinder Morgan's interest in sister-firm Kinder Morgan Energy Partners (NYSE:KMP), which contributed $133 million in pre-tax profits. That number was up 20% from the year-ago period.

Growth within Kinder Morgan proper was a bit more subdued; its Natural Gas Pipeline division grew earnings by just 7%, and retail gas sales declined slightly. The company's power division grew almost as fast as did KMP's contribution, at 19% -- but because its profits constituted just 4% of the total, that division's strong performance was little more than an asterisk on the quarter's combined results.

For the rest of this year, Kinder Morgan is sticking by its January prediction of better than $4.22 per share in profits. Based on yesterday's closing price, that would give the company a forward P/E ratio of 18. At the company's current 15% growth rate, that does not exactly make Kinder Morgan a bargain. It would be even less of a bargain if Kinder Morgan fails to exceed consensus analyst estimates of 11.5% long-term growth. (However, Kinder Morgan has presented analysts with "upside surprises" in each of the past four quarters.)

Then again, sometimes you simply have to pay up for quality.

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F ool contributor Rich Smith has no position in any of the companies mentioned in this article.