Hi Miraje,
With AI and global LNG exports KMI with the largest NG system in the US which moves 40% of our USA consumption is in a very good spot.
My suspicion is, he along with many others is PO'd about the dividend reduction, now many years ago.
Demand is growing and will accelerate on multiple fronts.
I think his adding of storage has been brilliant. Just in time for NG price to go negative and he can add reserves while getting paid to take it.
Somewhere in the scheme of things, not only will his revenue go up, right along with margins also rising.
I also like the return of capital they have done for years. It allows me to "add to" even as the price has climbed. With the dividend yield based on a declining cost and there expansions being funded internally, this is more than a great investment.
I'm of the opinion this stock is safe as any utility out there, and with a much higher potential to above utility norms of growth.
For all I care, it can take a drop like discussed, and I'll buy the dip very aggressively again.
When KMI dropped from low 20's in June of 2022 I thought it was beyond my adding to more as it dropped to hit 16's. The way it traded sideways from the 16's to the 18's for two years allowed me to sell puts and accumulate more shares without any risk, as the dividend increased (albeit slowly) all the way.
I now do not add any KMI by selling puts as the preice has gone up too much for a 7% yield to be generated.
If you take their steadily increasing dividend (half of which is ROC) add to that put premiums on the 16,15,14 and13 when sold out 6 to 9 months it builds cash very quickly.
I actually miss the steady cash revenue from put sales collateralized by cash. I would sell 4 16's, 8 15's 10 14's or 13's and hope like heck any or all of them would be assigned. That and a nice quarterly dividend made it easy to project my cash stream and lever that by bumping up the numbers in contracts during dips.
It wasn't uncommon to have 90 to100 contracts expiring every quarter for a year out.
If KMI gets a dip, I know how I'll play the game. Sell puts out 9 to 12 months, double down on lower strike prices on dips, and have the cash hoping to get a 7.5 to 7.75 dividend yield assigned to my trading account.
I repeat, I think he just PO'd or possibly short.
AI has assured global volume growth with LNG and now demand growth of AI generating the need for pipelines straight to the data base centers. An all new revenue stream!
JMHO
Bob
Please excuse the delayed response. I'm in the middle of remodeling my Wisconsin home and harvesting my 8 gardens - busy time! |
