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Analyst Blog  

Kinder Morgan Upgraded to Buy

October 20, 2008 | Comments: 0
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KMP
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We have upgraded Kinder Morgan (KMP - Analyst Report), the largest independent owner and operator of petroleum product pipelines in the U.S., to Buy from Hold on valuation grounds.

We believe that the recent broad MLP-group sell-off in general and KMP weakness in particular is overdone and provides for excellent buying opportunities. Distributions are safe as evident from KMP's just-announced distribution increase.

For the third quarter of 2008, the partnership announced a 16% increase in distribution to the annualized run rate of $4.08 per unit. We believe that MLP valuations are at extremely attractive levels.

Given its diversified business mix and comfortable distribution coverage ratio, we believe the partnership can easily maintain a distribution growth rate of around 8% annually over the next few years. With over $3 billion of organic projects beginning to come online over the next few years, we see favorable long-term growth profile for KMP.

Read the full analyst report on KMP


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Market Summary Feb 10, 2010 03:27 am ET
DJIA 10058.64  150.25 1.52%
NASD 2150.87  0.00 0.00%
S&P 500 1070.52  13.78 1.30%