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Here's Why Hold Strategy is Apt for Kinder Morgan (KMI) Stock

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Kinder Morgan, Inc. (KMI - Free Report) has seen upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The stock, carrying a Zacks Rank #3 (Hold), is likely to witness revenue growth of 8.7% this year.

What’s Favoring the Stock?

Being a leading North American midstream energy player, Kinder Morgan has the continent's largest natural gas transportation network. The company’s natural gas pipeline assets, spread across roughly 71,000 miles, are responsible for transporting approximately 40% of natural gas produced in the United States.

Moreover, being a transporter of roughly 1.7 million barrels per day of refined products through its pipeline network across 6,800 miles, the company is the largest independent transporter of refined products in North America. Kinder Morgan also has operating interests in 141 terminals.

KMI generates stable fee-based revenues from its vast network of midstream infrastructure. The midstream player’s business model is relatively less exposed to the volatility in oil and gas prices than upstream and downstream companies.

However, increasing total operating costs and expenses are hurting KMI’s bottom line. Also, there has been a slowdown in drilling activities, as upstream players mainly focus on stockholder returns rather than boosting output. This could affect demand for midstream assets.

Stocks to Consider

Better-ranked players in the energy space include Energy Transfer LP (ET - Free Report) , Marathon Petroleum Corp (MPC - Free Report) and Antero Midstream Corporation (AM - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Energy Transfer generates stable cashflows, banking on its midstream, intrastate and interstate transportation and storage assets. The midstream assets are engaged in transporting and storing natural gas, oil and refined petroleum products. Over the past 60 days, Energy Transfer has witnessed upward earnings estimate revisions for 2023 and 2024. 

Marathon Petroleum is a well-known name in the energy space. MPC is the operator of the largest refining system in the nation.  

Antero Midstream generates stable cashflows, banking on its midstream assets involved in gathering, compression, processing and fractionation activities. The properties are centered around the prolific Appalachian Basin. Over the past 30 days, Antero Midstream has witnessed upward earnings estimate revisions for 2023.

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