KMI

Kinder Morgan is a scaled North American midstream operator with an irreplaceable natural gas pipeline footprint and largely fee-based cash flows, which supports durable earnings through commodity cycles. Management highlighted record performance in Natural Gas Pipelines and a $10 billion backlog exiting 2025, with ~90% tied to natural gas and ~60% supporting power generation, reinforcing the company’s positioning for gas-to-power and LNG-adjacent demand. The Western Gateway refined products proposal with Phillips 66 is incremental, but the core moat remains regulated/contracted gas transport and storage assets.

Financially, 2025 revenue was $16.9B with net income attributable to KMI of $3.06B and EPS of $1.37 (vs. $1.17 in 2024), and Adjusted EBITDA was $8.39B. KMI’s 2026 budget targets Adjusted EPS of $1.36 (+5% vs. 2025 adjusted) and Adjusted EBITDA of $8.6B, while ending 2026 at 3.8x net debt/Adjusted EBITDA, suggesting leverage is controlled but still meaningful. Valuation looks less forgiving after the run-up (52-week low/high about $24.39/$34.73; market cap roughly $73B), so execution needs to stay clean.

Thesis: KMI offers a relatively defensive way to play multi-year U.S. natural gas demand growth, with visible backlog conversion and modest, dividend-led total return potential. Over the next 12 months, catalysts include Q1 2026 results (expected EPS around $0.38 on ~$4.55B revenue) and progress on placing backlog projects in service, alongside a planned 2026 dividend of $1.19 per share. Key risks are rate-driven valuation compression for yield equities, permitting/construction slippage, and downside from weaker volumes if industrial/power demand softens.

Recommendation: HOLD. The backlog and 2026 earnings/dividend growth plan support the story, but the stock’s near-high trading range leaves less margin of safety if macro or execution disappoints.