Wednesday, April 17, 2013
Dividend Increase: KMI
Kinder Morgan, Inc. (KMI) is increasing its quarterly dividend by 2.7%, from $0.37 to $0.38 per share (press release). This is the second increase from KMI this year, coming after a 2.8% increase in January. Given that I own a total of 90 shares of KMI (40 in my taxable account and 50 in my Roth IRA), my quarterly dividend increases from $33.30 to $34.20, which will add an extra $3.60 to my annual dividend income. This dividend increase boosts my yield on cost to 4.34% in my taxable account and 4.11% in my Roth IRA. Thus far this year, there have been dividend increases for 15 of the 28 dividend growth stocks in my portfolio. My forward 12-month dividend total is now $2,399.
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I love the smaller quarterly increases since they let our dividends compound faster.
ReplyDeletePIP: These quarterly dividend increases also represent more frequent positive signs from management. A company will only increase its dividend every quarter if management is confident about their ability to pay the dividend going forward.
DeleteDGM,
ReplyDeleteGreat news! KMI had a very strong quarter. I love it. The dividend raise was very nice, but I expected it.
KMI is currently one of my best ideas. If I didn't already have 150 shares I'd be buying. I think this is a fantastic long-term opportunity as the build-out of natural gas assets continues here in the U.S. KMI is the biggest, and arguably the best. I love owning the biggest/best. Scale is priceless.
I'm siding with Richard Kinder on this one.
Best wishes!
DM: I also expected an increase, but it's always nice to see the actual announcement.
DeleteI am interested in adding to my KMI position (which represents 4.2% of my portfolio), but it will have to wait until the second half of the year, when I will be situated more appropriately to resume buying on a regular basis. I wouldn't mind purchasing another 50 shares for my Roth IRA.
Why do you invest into KMI and not KMP for example?
ReplyDeleteMartin: There are two main reasons why I chose KMI. First, it is a C-corporation that pays dividends, so it doesn't have the tax complications of an MLP. Second, its long-term dividend growth is expected to be higher than that of KMP because of incentive distribution rights.
DeleteTwo increases in just a few days. Gotta love it. Sure beats the 1.5% increase i got on my salary! Take care.
ReplyDeleteADY: It's always nice to get a series of dividend increases over a short time period. In general, they come more often and are larger than salary increases, at least in my experience. It's part of what makes dividend growth investing a very motivational strategy!
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