Can This High-Yield Energy Stock Support Its Dividend?
The natural gas pipeline and storage industry has slowed down in recent years. Many players are prioritizing improvements to existing operations instead of growth capital expenditures (capex). Like its peers, industry-leading pipeline giant Kinder Morgan (NYSE: KMI) is focused on shoring up its balance sheet so that it can outlast future downturns. Financial health adds stability to Kinder Morgan's business, but the trade-off is that it requires preserving cash and spending less money, which impedes its ability to grow.
Investors on the hunt for fast-growing energy stocks probably won't like Kinder Morgan's slow and safe strategy. But their loss could be income investors' gain. What Kinder Morgan lacks in growth it makes up for with a dividend yield above 6%. The question is, can it support it? Let's take a look at Kinder Morgan's business to determine if its dividend yield is sustainable, or if it's bleeding the company dry of too much cash.
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Source Fool.com
