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Kinder Morgan (KMI) Exceeds Market Returns: Some Facts to Consider

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In the latest trading session, Kinder Morgan (KMI - Free Report) closed at $28.83, marking a +0.42% move from the previous day. This change outpaced the S&P 500's 0.16% gain on the day. Meanwhile, the Dow gained 0.01%, and the Nasdaq, a tech-heavy index, added 0.46%.

The the stock of oil and natural gas pipeline and storage company has risen by 8.46% in the past month, leading the Oils-Energy sector's gain of 1.79% and the S&P 500's loss of 3.59%.

The upcoming earnings release of Kinder Morgan will be of great interest to investors. On that day, Kinder Morgan is projected to report earnings of $0.35 per share, which would represent year-over-year growth of 2.94%. Meanwhile, the latest consensus estimate predicts the revenue to be $4.14 billion, indicating a 7.66% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.28 per share and revenue of $16.4 billion. These totals would mark changes of +11.3% and +8.64%, respectively, from last year.

Any recent changes to analyst estimates for Kinder Morgan should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.97% upward. Kinder Morgan is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Kinder Morgan is holding a Forward P/E ratio of 22.47. For comparison, its industry has an average Forward P/E of 18.02, which means Kinder Morgan is trading at a premium to the group.

One should further note that KMI currently holds a PEG ratio of 3.26. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Oil and Gas - Production and Pipelines industry had an average PEG ratio of 2.91 as trading concluded yesterday.

The Oil and Gas - Production and Pipelines industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 78, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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