Kinder Morgan Inc (KMI)

[outlaw_beach]

I like Kinder Morgan Management (KMR)

It has a 6.9% dividend paid in stock so it's like an automatic dividend reinvestment plan (see motley fool article).

The CEO's salary is $1 so "his fortune rises and falls with his ownership stake" (from Smart Money Magazine, May 2005 edition). Also according to the Smart Money article the CEO, Richard Kinder, is very well respected. Richard Kinder is the CEO of both KMI and KMR.

The structure is somewhat complicated as written about in this motley fool article

http://www.fool.com/news/commentary/2005/commentary05042505.htm?source=eptyholnk303100&logvisit=...

The following is an excerpt from that article.

"As complex as Lennar's structure may be, it pales in comparison to that of energy distribution giant Kinder Morgan (NYSE: KMI). Among its assets is the general partner stake of Kinder Morgan Energy Partners (NYSE: KMP), one of the largest pipeline companies in the United States. ...

For investors looking for income growth and a high yield without the headaches of partnership ownership, Kinder Morgan's operations include a third company, Kinder Morgan Management (NYSE: KMR), which is tied to the other two firms. Kinder Morgan Management pays its quarterly distributions based on comparing the partnership's distributions to its own stock price, and it pays the distributions in additional shares of stock rather than in cash. It's similar to an automatic dividend reinvestment plan, only without cash being paid. Because of its structure and stock dividend policy, Kinder Morgan Management is much friendlier to IRAs and other tax-advantaged investment accounts, as well as to ordinary investors who would otherwise reinvest their distributions."

Also KMR trades at a discount to KMP.

On April 20, 2005 KMP announced all time record quarterly earnings and raised their quarterly distribution. KMR's distribution is tied to KMP's distribution and is the same amount as KMP's distribution.

I just started looking at this but so far I like what I see. The only potential concern I have is what happens to the price of the stock when energy prices come back down. So far though the bottom line is this looks like a very good investment for the long term to me.

Hopefully more people will join this discussion and get the ball rolling. So far it's been kind of slow. This is only post number 2 and the board has been up for 4 months already!!