Better Buy: Kinder Morgan vs. ONEOK
Kinder Morgan (NYSE: KMI) and ONEOK (NYSE: OKE) have yields of 8% and 12%, respectively. Dividend investors willing to venture into the oil and natural gas sector will definitely find those numbers enticing, given the fee-based nature of the midstream sector where this pair operates. But there are some key differences here you need to understand before jumping aboard either name.
Midstream energy companies own the pipelines, processing plants, storage, and other physical assets that help to move oil and natural gas around the world. This is largely a toll-taker business, in which companies like Kinder Morgan and ONEOK get paid a fee for the use of the assets they own. The price of the products flowing through their systems isn't the main driver of top- and bottom-line performance -- demand is.
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Source Fool.com
