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Kinder Morgan (KMI) Plans to Hike Dividend, Issues Guidance

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Kinder Morgan, Inc.(KMI - Free Report) has revealed the board of directors’ intention to increase annual dividend for 2021 to $1.08 per share. This will mark a hike of 3% from 2020 dividend.

The midstream energy giant added that its projection for distributable cash flow (DCF) in excess of discretionary capital expenditures and dividend payments for 2021 stands at $1.2 billion, reflecting an uptick of more than $700 million from its 2020 guidance. The company plans to allocate part of this excess coverage for reducing debt burden and repurchasing some shares, as a means of rewarding investors.

However, the midstream energy firm expects DCF for 2021 at $4.4 billion, reflecting a decline of 3% from the company’s 2020 DCF projection. The underperformance on the DCF front can be primarily attributed to a decrease in recontacting rates on several pipelines, mainly those transporting natural gas, fall in crude volumes and a decline in realized prices in the CO2 business.

The leading North American energy infrastructure company disclosed plans of investing $0.8 billion in expansion developments in 2021. The company also said that it has successfully weathered the coronavirus pandemic-induced economic downturn. The midstream firm’s decisive actions include a combined reduction of expenses and sustaining capital expenditures in 2020 by $190 million versus the initial projection. The company also downwardly revised its 2020 discretionary capital spending projection by roughly $680 million. Following these measures, Kinder Morgan expects its DCF less discretionary capital expenditures to result in an improvement of $160 million compared to the initial projection.

Headquartered in Houston, TX, Kinder Morgan currently carries a Zacks Rank #3 (Hold). Meanwhile, some better-ranked players in the energy space include Summit Midstream Partners, LP (SMLP - Free Report) , DCP Midstream, LP (DCP - Free Report) and HighPoint Resources Corporation (HPR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Summit Midstream has seen upward earnings estimate revisions for 2020 in the past seven days.

DCP Midstream has seen upward estimate revisions for 2020 earnings in the past 30 days.

HighPoint is likely to see earnings growth of 167.5% in 2020.

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