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Dril-Quip, Inc. (DRQ) - $25 value - yours FREE >>
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Here's Why Hold Strategy is Apt for Kinder Morgan (KMI) Stock
Kinder Morgan, Inc. (KMI - Free Report) has seen no earnings estimate revisions for 2023 and 2024 in the past seven days. The Zacks Consensus Estimate for earnings for 2023 and 2024 is pegged at $1.09 and $1.13 per share, respectively.
What’s Favoring the Stock?
Being a leading North American midstream energy player, Kinder Morgan, carrying a Zacks Rank #3 (Hold), has the continent's largest natural gas transportation network. The company’s natural gas pipeline assets, spread across roughly 70,000 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 140 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.
What’s Hurting it?
However, increasing operations and maintenance costs 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 Murphy USA Inc. (MUSA - Free Report) , Sunoco LP (SUN - Free Report) and Dril-Quip, Inc. (DRQ - Free Report) . While Dril-Quip carries a Zacks Rank #2 (Buy), Murphy USA and Sunoco sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA is a leading retailer of gasoline. MUSA has more than 1,700 stores and has witnessed upward earnings estimate revisions for 2023 earnings in the past seven days.
Sunoco, a distributor of motor fuel to approximately 10,000 convenience stores, has a stable business model. For this year, SUN has witnessed upward earnings estimate revisions in the past 30 days.
Dril-Quip is a leading provider of highly engineered equipment, service and innovative technologies that are being employed in the energy sector.