This Nearly 7%-Yielding Dividend Stock Is Getting Even Stronger
Kinder Morgan (NYSE: KMI) already has one of the safest dividends in the energy sector. The natural gas infrastructure giant generates gobs of steady cash flow. It only pays out about half that money to investors via a dividend that currently yields almost 7%. It uses the other half to expand its operations and strengthen its already solid balance sheet.
However, that rock-solid financial position isn't stopping the company from taking advantage of opportunities to get even stronger. It recently capitalized on the robust conditions in the liquified natural gas (LNG) market to bolster its finances, putting it in an even better future position.
Kinder Morgan recently closed the sale of a 25.5% equity interest in its Elba Liquefaction Company for $565 million. Elba is a natural gas liquefaction and export facility in Georgia that can produce 2.5 million tons annually. It sells that LNG to Shell under a long-term contract. The deal values the facility at $2.3 billion, an increase from the company's $2 billion construction cost. That's roughly 13 times the facility's estimated earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2022. It's an attractive value considering that Kinder Morgan trades at 11.5 times its enterprise value to EBITDA.
Source Fool.com
