Why I Bought KMI

The most recent addition to my dividend stock portfolio is KMI. Kinder Morgan Inc. or KMI is engaged in pipeline transportation and power storage. It is the chief supplier of the colorless, odorless gas known as carbon dioxide which is utilized in the improved oil retrieval jobs in North America. Kinder Morgan Inc. is an American company.

I have been interested in investing in Kinder Morgan for a few years but didn’t want to invest in KMP since it is a limited partnership unit and issues a K-1 which could complicate my taxes.  It probably is not that big of a deal to report the K-1 on your taxes but since there are lots of other dividend stocks available that wouldn’t require the extra tax complication I avoided KMP.

Since I first looked at Kinder Morgan they have added the KMI option to allow investing in their company.  This option is not a partnership unit but shares in the general partner interest and the investment is treated like a regular stock purchase.  The KMI option allows me to invest in Kinder Morgan and receive an approximately 4% dividend yield with great potential for dividend growth.  I’m predicting that natural gas will become a much greater used source of energy in the next few years.  Even if I’m wrong I think KMI will at least maintain their dividend and KMI doesn’t need the price of natural gas to rise in order to increase their profits. I’m not an investment expert and I’m obviously biased since I own KMI but I believe it is a great dividend stock to own both for its current dividend yield and its potential for future dividend growth.